Adulthood brings not only greater freedom, but also new responsibilities. The most important of them are managing your own finances and the ability to save them. How can young people start saving money? What helps you control expenses? What are the most common saving mistakes? Where can young people look for work? You will learn everything from the post below.
How to start saving?
Would you like to start saving, but you have no idea how to go about it? I will present you with an action plan, the implementation of which can make saving money much easier. Let’s start!
Objective
When creating a savings plan, it’s a good idea to start by setting specific goals. It is easier to pursue something that has been clearly defined beforehand. This applies not only to personal finances, but also to other areas of our lives.
Moreover, the goals you define should be motivating in some way. Thanks to this, you will depend on achieving them. It is a good practice to save them in paper or electronic form – whichever is more convenient for you. The point is to remember them and look at them, especially when you are planning a larger purchase. This will help you decide if you really need this thing at the moment or if it’s better to leave your savings alone.
You can also divide goals into individual categories, which will make it easier to find yourself in them and add details if necessary. For example, it can be: future, family or holidays.
Home budget plan
Let’s start with the fact that everyone has certain financial resources. Creating a budget plan gives you a detailed view of your personal finances. In principle, the development of such a plan brings only advantages. You’ll find out when you make your own.
The household budget is divided into income and expenses that you incur in a specific period of time, e.g. a month. Regular control combined with verification of the flow of these funds should be the basis for budget management.
Where to start planning? To begin with, make a small summary of your earnings (or cash receipts in general) so you know how much you have available. Then separate your monthly expenses into 2 categories: fixed and irregular.
Fixed expenses are all regular payments, e.g. bills, rent for an apartment, fuel, loan installments, etc. When it comes to irregular expenses, here we are talking about all kinds of costs that are unsystematic. They can be one-time or need to be paid once in a while. Examples of such expenses may be, for example, holidays, occasional gifts, car insurance or doctor’s visits.
Another issue is the division of revenues into real, which will appear for sure, and anticipated. The latter may differ significantly from our calculations.
Now we add up any irregular expenses that may occur during the year. It should be borne in mind that the amount that we came out is also the amount that we should save for this year. Here it is worth mentioning that it is a good practice to spread the planned variable expenses over individual months. Thanks to this, you will avoid overstretching your budget.
How will controlling your expenses help you? It will make you stop spending money on something you don’t need. It will also teach you how to manage them economically.
I will add that the budget plan – just like the goals – can be written down in a notebook or in the mobile application, if you prefer digital solutions.
Budget analysis
Having developed a budget, you should break it down into prime factors. How? It would be good to start the analysis with expenses.
You’ve probably noticed that it’s easier to spend money when you don’t realize how much of it you actually spend on specific things. Once you realize this, you will certainly decide to limit many of them.
You can do this by starting with the simplest steps, e.g.:
- reduce transport costs (instead of paying for fuel, you can use public transport),
- stop buying new clothes if you don’t need them,
- limit eating out,
- shop wisely – buy less but more; prepare a shopping list in advance,
- sell clothes you don’t wear and things you don’t use,
- reduce the costs spent on pleasure,
- unsubscribe from subscriptions that you pay for out of habit (even though you rarely or never use them).
Remember that if you are really going to start saving, you just have to start cutting costs. You can do it gradually, not all at once. It will be less painful this way. After reducing expenses, we will feel the difference in the condition of our finances almost immediately.
Find an additional source of income
If you have some free time, you can look around for some extra activity. Often you don’t have to look far. Maybe you have a hobby you’re really good at? Think about whether there is a chance to turn it into earnings? Even these small sums, which are an additional source of income, are able to help you achieve your goal.
Another option is a side job that you can do remotely, e.g. in the evenings, after working hours or on days off. There are plenty of remote job offers online, even part-time. If you spend some time, you will surely find something for yourself.
However, if you are one of the very young people who do not work yet (e.g. due to school), this may be a good time to find a job. It will also teach you how to manage your money so that you can buy something more expensive. In addition, you will also gain experience that will help you keep your finances under control in the future.
Remember that having extra money is always a good form of insurance. Even if at the moment you think you don’t need them.
If you have debts, settle them
Research confirms that more than half of Poles have a loan. Interestingly, they usually buy electronics or household appliances for borrowed money. Many people have taken this step in recent years.
So if you belong to this group, pay off the loan first. A more complex issue is a mortgage that is taken out to buy an apartment or house. The point is that you will pay it back for many years – currently such contracts are drawn up for up to 35 years.
Paying off your debts will help you release yourself from the constant stress that comes with it. Also settle any arrears, especially those on your credit card.
Take advantage of finance automation
Online banking systems allow you to make regular transfers that are sent automatically, e.g. on a specific day of the month. So you don’t have to deal with it personally or worry about spending that amount on something else. It is best to settle all payments immediately on the day of payment. This will give you peace of mind.
It is also important that you regularly control the progress of saving by looking at your household budget.
Time to invest
You have managed to build a financial cushion, the loans have been repaid. Now you can think about multiplying your savings. How? Even through investments.
However, before you start investing, you need to learn about it. Thanks to this, you will minimize the risk of losing money, and you will learn to make well-thought-out decisions (not only investment ones).
When it comes to investing itself, you surely know that there are many possibilities. You can invest in real estate, bonds, mutual funds, commodities and even cryptocurrencies.
How to control expenses?
Everyone has certain financial obligations that must be paid regularly. It can be rent or phone subscription. However, there may also be expenses that are not necessary and make it difficult for us to save money.
Surely you are aware that spending money in an inappropriate, even lavish way can lead to unpleasant situations. There may even be debts if you don’t pay something on time. You may now think that there are all kinds of loans and credits. True, but not a good idea. Especially in the case of a young person who does not yet have experience in finance.
There are ways to help you effectively control your spending. Here they are:
- following the established rules + specifying your needs (thanks to this you buy things that are really necessary),
- planning the budget well in advance (before the beginning of the month or year, or its beginning – depending on what period you prepare it for),
- systematically writing down the specific amounts you spend on various things during the month (along with an assessment of possible cost reduction),
- observation (along with verification) of one’s own weaknesses – very helpful when limiting individual expenses.
You are probably asking yourself now which of these methods is the most effective? I may disappoint you now, but it will be really effective to combine them all.
What are the benefits of controlling expenses?
Controlling expenses has many advantages, but the most important of them are:
- exercise of willpower,
- learning to think ahead,
- the ability to save money,
- getting rid of the tendency to mismanage finances.
Ways to save money
Emergency fund
It happens that you want to save, but you do not have a specific goal. You don’t really need to have it. You can set up an emergency fund. Money on it will certainly not be wasted – it will simply be waiting for the moment when you need to use it. When can such a moment come?
Unplanned expenses can appear at any time. Suddenly, a family event pops up, an urgent visit to the doctor, a breakdown of the car, washing machine or other device that you use every day.
With such a fund, you will have savings that will make an unforeseen emergency less of a blow. I would also like to add that having extra cash can be very useful not only when such a situation occurs. Knowing that you have some money set aside, you will also avoid the stress associated with the very vision of something like this in the future.
Deposit
A fairly common option to facilitate saving is a bank deposit. It is assumed for a limited period of time, e.g. 12 months. There are also short-term deposits, e.g. for a few months. In addition to keeping your money safe, it also guarantees interest.
They depend on the interest rate that is currently in effect. Interest is paid by the bank at the end of the current contract. If you want to withdraw money before the end of the contract, you have to take into account the loss of interest.
Savings Account
Another option for dealing with emergencies is a savings account. Keeping such an account has a lot of benefits, one of them is interest, which increases depending on the applicable interest rate per year. Importantly, a savings account provides a higher interest rate than a current account, i.e. a traditional one.
Besides, you don’t have to make regular deposits, you can also deposit and withdraw money according to your needs. Generally, keeping a savings account gives you more freedom in disposing of the money set aside than a deposit. It is worth reviewing the offer of banks and choosing something for yourself.
Additional bank account
At this point, I will also mention that there are people who are satisfied with a separate bank account. They store money on it, which they consider to be a financial surplus. Currently, practically every bank offers a special account for young people (there is always a specific age range).
They are addressed to people who care about a bank account that is cheap to maintain and easy to use. However, regular deposits into the account are usually required for it to function. In addition, maintaining such an account in some banks involves certain fees, e.g. for a credit card, so there are costs for its maintenance.
Financial cushion
All of the above options can be considered a financial cushion. Although, in fact, it all depends on the individual – each of us has different needs, different earnings and other opportunities. One person may be satisfied with a financial cushion that will correspond to 3-month expenses, and another – e.g. annual. Remember that in saving, it is important not only how much you earn, but also how much you are able to save.
Do you want to start saving realistically? You can make it easier by using a money saving apps. From now on, you don’t have to worry about writing everything down in a notebook because you can do it on your smartphone. A good practice is to enter new expenses immediately after shopping, e.g. while still in the store. Such tools make saving much easier.
Mistakes in saving money
Saving money can be effective if we take it seriously and skilfully approach the subject. Everyone would like to be infallible, but in reality we all make mistakes. Let’s now focus on the mistakes that are most often made when saving.
You spend your savings
Imagine this situation. You try to save a certain amount and even succeed. After some time you achieve your goal, so you are proud of yourself. Unexpectedly, however, you come across a brilliant promotion for a product that you were planning to buy anyway. With the fact that in the unspecified future. So why are you deciding to buy it right now? It’s simple – because there is a promotion.
At this point, you don’t need it at all, but you’re not thinking rationally. You are buying this product. The next day you realize what you did. You realize it wasn’t meant to be.
You probably already know what I mean. Determination and patience are fundamental in saving. You bet you’re going to save, so you do. This situation should not happen.
You cannot give in to weakness, even if it is only temporary. You didn’t save your money to spend it on something that you don’t need at the moment. Or maybe you don’t even need it at all. Not only now, but never. You have a set goal and you have to stick to it. Remind yourself of this every time you feel like spending your savings.
You only care about multiplying your savings as quickly as possible
If your main goal is to multiply your savings quickly and you do everything to achieve it, then you probably grab every opportunity. Have you tried transferring funds to other currency markets? Have you invested in cryptocurrencies? These are examples of actions that many people decide to take, hoping to increase their savings.
Often, however, it’s the other way around, and all they’re left with is bitter disappointment. And in many cases, anger at themselves if it turns out that they not only failed to multiply their savings, but lost them irretrievably.
Be careful not to act rashly or recklessly. After all, it’s about your money.
You only save in theory
Have you read a few articles (or maybe even one) or watched a video where someone describes proven ways to save money? Do you feel like you’ve already started doing it yourself? Nothing could be further from the truth – you really only learned the theory. You haven’t made a home budget plan, although that’s where you should start your saving process. You don’t even know where a lot of your money goes. In fact, you haven’t put down a penny. I don’t suppose you’d agree that this can’t be called saving?
The secret is that if you want to start saving (but seriously), you need to save even small amounts, but regularly. The last word is crucial here. Remember them. By writing about small amounts, I really mean small sums – at the beginning it can be even several dozen zlotys a month.
You say you have nothing to save
How is this possible? Most of the time you just spend too much. If you feel this applies to you, go back to the section on how to start saving.
It may also be that you earn too little because the cost of living (or expenses) exceeds your salary. In addition to these two possibilities, there are others, so be sure to think about what is the reason for this thinking in your case. Then you need to find a solution. A raise, a change of job, or maybe finding an additional source of income?
Your money disappears
Have you ever had a situation where you really don’t know where your money went? This must mean that you have not worked out your budget correctly. Cash leakage usually happens as a result of various random situations.
What to do to avoid it? First of all, systematically control your expenses. In this way, you will no longer associate the end of the month with the fear of closing the budget.
You don’t have a set goal
This point connects to the first one on this list. Why? If you do not have a specific goal for which you want to save, there is a greater possibility that you will spend money that will be a financial surplus. And you’ll probably regret it later.
How to earn money at a young age?
There are plenty of ways to earn money, even at a young age. I will now introduce you to some of them.
Give private lessons
Is science not a problem for you? Are you exceptionally good at a subject? Then you might consider tutoring? You can start by offering these services at your school.
The Internet is a very good place to post an advertisement – it will make it easier for you to reach people from other schools. There are also special tutoring portals where you can create an account and offer your services. Another option is also online tutoring – you can arrange online meetings. This is becoming more and more popular, especially in cases where the person concerned is unable to reach you or simply lives in another part of the country.
Tutoring is a great way to earn your first money, especially if you are a student. There will certainly be people who have problems with assimilating the material and will be happy to use help, especially before the final exams.
It often happens that the teacher is not able to reach the student in the same way as the other student. If you are patient and have the right attitude, check how you will find yourself in such a role. It may turn out to be a hit.
Sell things you don’t need
Clothes don’t fit in your wardrobe? A lot of them you don’t use at all anymore? Or maybe you also have other unnecessary things, e.g. books that you have already read? Want to make room for something new? I have the perfect solution for that – sell it.
You must have noticed that online sales are booming – especially now that everything is more expensive. People are very eager to buy things online, even used ones. If you want to sell something, it’s best to use portals with ads like OLX or Vinted. You can also post your offer on Facebook Marketplace.
Childcare
Do you have an approach to children? Do you get along well with them? If so, then try your hand at caring for a child. The demand for nannies or carers is high. Nurseries and kindergartens have fixed working hours, which means that parents must pick up their children at fixed times. Unfortunately, it happens that they do not have the opportunity to organize their work in such a way that everything works together. There are also situations when parents want to go out in the evening, but have no one to leave the child with.
This is a brilliant option for young people who have the desire and free time. Taking care of a child is not difficult, especially when you already have some experience in this field, e.g. you took care of younger siblings.
How to find such a job? To begin with, search the neighborhood groups, you may find offers that interest you. You can post an ad yourself on a portal dedicated to this type of service or other, where you can find offers from various categories. In addition, there is still the option of posting advertisements on traditional notice boards.
You probably won’t have much trouble finding customers. If you prove to be a good tutor, it is very possible that you will get more and more assignments due to referrals. Such knowledge may prove useful in the future.
Gastronomy
Another way to earn money is to find a side job in a restaurant or cafe. The greatest opportunities will probably be in the city center. This is associated with heavy traffic, especially in the afternoon and evening hours, as well as on weekends.
Such places very often offer flexible schedules that will allow you to adjust your working time to school or university classes. In addition, you can find this type of advertisement as often – casual workers are welcome.
Scholarship
Do you have a high grade point average? You can probably apply for a scholarship. Familiarize yourself with the rules for granting it and act. Its amount will depend on your average and the school you attend. Importantly, the scholarship is paid monthly.
In college, the scholarship can be really high, although there are certain requirements here too. It is often able to cover tuition fees – in the case of private universities. If you study in another city and you manage to get a scholarship, it is very possible that it will allow you to rent an apartment.
If your studies are average, but you are a great athlete, you can count on a scholarship for sports achievements. Especially if you represent the school in various sports competitions. In most cases, the amount will not differ from what you get for your academic performance.
Earning online
By searching websites for job seekers, you can easily find jobs online. There are a lot of offers on them, and what is important – also for inexperienced people.
Do you have a light pen and know the rules of spelling as well as the lyrics of your favorite songs? You can try copywriting. Today, every business needs a website to gain and keep customers. Very often it is associated with having a blog where new entries should appear regularly. However, not everyone has the time and ability to deal with it, which is why entrepreneurs are looking for copywriters who do it for them.
Hard to believe? Go to any website with classifieds, and then enter “copywriter” in the search engine. You will immediately notice that there are a lot of offers of this type. What’s more, a copywriter writes not only extensive articles for blogs, but also product descriptions for online stores or various types of guide texts. There are plenty of possibilities.
If you are a graphic designer, you can offer your services to others. In the age of the Internet, everyone wants to present themselves or their company in the best possible way on the Internet. However, not everyone can do this. So we are looking for graphic designers who will create graphics for social media or other promotional materials.
A related option is social media support. Here again, knowledge and experience are needed, which some simply do not have. Who knows better about all the news in such services, if not young people?
My goal is that you can look for a job, e.g. as a social media manager and run the account of a company or public figure. Since you spend so much of your time on the Internet, why not start working this way? By devoting only a few hours a day to it, you will get extra money that will definitely be useful to you.
Where to look for job offers?
Nowadays, it is definitely worth betting on the Internet in the first place. You can focus on the following areas:
- typical job portals (OLX, pracuj.pl, rocketjobs, praca.pl or indeed),
- Facebook groups (search for the industry you are interested in),
- websites for freelancers (freelancer.com or we work remotely),
- social networking sites (there are accounts that, due to their reach, publish specific job offers, helping observers change their current job or find an employee. One example will be biurwa, where every Wednesday there are offers as part of the so-called working Wednesday).
Summary
You can see that there are plenty of opportunities to earn and save money at a young age. If you take it seriously, you can achieve success. You will also need determination, because it may not be easy.
If you would like to learn how to manage your own budget first, you can start with our online economic strategy game. It’s also great for people who want to practice saving money or learn how to invest before they get into it in real life. Sign up for CashPlay today and become the richest man in the world!
No comments