It’s been such a long summer with inflation going higher and higher. However, what does the term “inflation” actually mean? We speak of inflation when there is a general increase in prices. When inflation occurs, less and less can be bought for the same amount of money. In other words, inflation causes the value of money to fall over time. Inflation currently stands at 17,9% year-to-year , so this is called galloping inflation. This means that you generally paid 17,9% less money for the same products last October than you do now. It doesn’t sound sensational, does it? And you as a student have a really tight budget. So how to take care about your finances?
Taking care of your finances comes down to 3 pillars which are saving, increasing income and investing. To start with, we can say that they are equally vital. The key to proper financial management is balance. Therefore, we should keep all of them in mind. And don’t try to focus too much on just one.
Let’s start with controlling your expenses. This is the point which you should concentrate on the most, even though I said previously that all legs are equally important. As a student, your budget is probably extreamly small. You may already be a master at finding the best prices and the best occasions. If so, good for you. If not, I will show you the first step to begin your journey to becoming a master saver.
So first of all, the thing you should start with is to do a cashflow. What do I mean by that? You should begin your journey by making a sheet with all your expenses and income each month. You may ask why I should do that. The reason is quite obvious, to see which way your money flows. Then, when you know where most of your money goes, you can cut down some of these expenses. However, only you know what you spend your money on and what expenses you can cut back on. This could be groceries, eating out or clothes. Even subscriptions or things you don’t know you’re spending your money on. This is the first step you should focus on. Even if you think you’re refectory in control of your spending, I recommend you make a list like this and see if you can’t cut back on something.
Controlling your expenses may be really vital, yet in my opinion, step number 2 may be even more important. It is to increase your income. The possibilities are endless. However, why is increasing your income more important than controlling your spending. It is because you can limit your expenses to a certain extend, after which there are no more opportunities. So increasing income is the only choice then.
As I said earlier the opportunities are countless. Although when you are a student, you don’t have that much time to work full-time. Yet there are other possibilities like working part-time, giving extra classes to students, taking part in some extra events like concerts. If you are good at baking, you can advertise online and bake cakes for special occasions. Maybe you’ll be able to find a job in the field of your studies where you’ll not only earn some money but also gain some experience necessary for your future career. The point is simply to start increasing your income. Step by step.
So far I’ve mentioned 2 pillars: controlling your expenses and increasing your income. Many people stop there, but they shouldn’t. Because of the last, but not least, the third big leg: investing your money. Because if you have some money set aside and they’re just lying in your bank account then the INFLATION mentioned at the beginning is slowly eating it away. So if you’ve got any extra money left it’s worth moving it so it can work for you. Not only can you put your cash in the stock market but you can also invest in yourself. For example: buy yourself a course about programming or a language course and regularly expand your knowledge of the financial world, which will increase your value on the market in the future.
To sum up, I talked about 3 pillars, which are controlling your expenses, increasing income and saving and investing money wisely. This scheme looks kinda easy but do you actually follow it? Have you ever thought about your finances in this particular way? I hope this article will be an opportunity for you to take a closer look on your finances.
Magdalena Pałęga, Koło Naukowe Anglistów AZ; fot. pixabay.com