Looking outside the window today, I cannot ignore the fact that it is the perfect weather for writing. I have rainy weather, coffee, and luckily enough, I know the topic I want to write about as well. 
My source of inspiration is no other than my latest receipt. It clearly shows that I have gone overboard with my spending this week. It gave me a good reminder to give my finances a quick check. Being abroad on an exchange can be a great environment to work on better managing your finances. However, you need to start way before.

If you’re not the best at managing money, the following ideas could help you improve, and – who knows – maybe in a couple of months, you can already plan your next adventure in a more realistic way. I funded all my exchanges myself and kept it up while on my exchange right now.  And here is how I did it: 

1. Track your expenses

What gets measured, gets managed. The first week (abroad or at home starting my savings journey) was always a trial week for me. I would track all the expenses and create an average per day. 

By the end of the week, I get a feeling of how much money I would be spending on a daily basis. Afterward, I also add some monthly bills like a phone subscription. Once I had the final sum, the next step was planning. Planning how much less I can spend and analyzing what are the things I bought but could live very well without them. 

This plan would then be my spending benchmark. I do my best to not cross (or if it happens, then not by a lot). 
Any subscription you don’t need, cancel it. Simply put, make sure you spend as little as possible, to have a considerable amount of savings. This exercise can be best done with paper and pen. However, excel sheets work just fine, or even an app can be used for this purpose. 

2. Start with the essentials

Personally, I do not have debt, but I do view costs like rent or other monthly subscriptions I cannot cancel, as “debt”. These expenses are the ones to get rid of first. The remaining money can be yours to budget for other expenses like groceries.

It is well-known to have a 50-20-30 ratio. 50% of your income to go for must-have expenses (housing, food, water bill, etc), 20% to go on personal extra expenses like entertainment and 30% will go to savings. However, these can differ from person to person, depending on your priorities. I like to save 50%. This way, once I reach a comfortable amount of money where I have more leeway, I can treat myself with a small present. Going out, or who knows, a flight ticket when it is safe to travel?

You can of course also give yourself time when it comes to the savings.

3. Buy what you need, not what you want

Sometimes it is always a good idea to bring in reason to your purchasing behavior. Before going to the counter to buy that new trendy jacket, ask yourself: “Do I really need this jacket right now?” I mean you already have 10 back home. 
Are you going to buy it because you need it, or because you think you will get more likes on a new post? At the end of the day, social media makes it easy to feel insecure even easier to cover up that gap with all the things you see trending out there. Fear of missing out is quite the deal.

The same goes for the newest fancy car. A second-hand car if you think about it, does the same thing as a brand new one. Or if you do not have to commute as much, why even get one? 

4. Get income

Surely, if you do not receive any income, you do not have money to manage. Getting a part-time job or doing some side projects from time to time is the way to go if you are still a student. There are plenty of possibilities nowadays, just a Google search away. Create your own small craft business, offer to tutor, take dogs for a walk or babysit, get a part-time job at the local supermarket or restaurant.  The possibilities are endless. What’s important, however, is to start

5. Keep your goal in sight

Lastly, there always has to be a light at the end of the tunnel. If you immerse yourself in this journey of savings, without actually having a clear goal of why or for what you are saving, it will become a meaningless and unsatisfying journey. 

Goals can be defined in percentage or in the actual sum. Managing your finances doesn’t need to be boring or stressful. Bring in fun and a little bit of challenge in this quest!

In the end, consistency is key, and the more you are actually mindful and meticulous about your money and where it goes, the more it will become your second nature. It for sure will “pay off” to do these small exercises and results will be visible in a short time. 

Even though I can say that I can manage my finances to a decent level, it wasn’t always the case. I started off with really bad habits. With some practice, pivoting any kind of habit is possible.

And reminiscing on my last trip, there is always more to learn about managing personal finances. Do not shy away to keep learning about this topic! There is never a wrong moment to start.

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