Will you become a financial master?

Last updated on Monday, 21/03/2022

Young people come into contact with money at a very early age. From your first pocket money to your first salary, understanding the value of money and how to handle it responsibly is not always easy. Discover tips on how to earn, manage and save money and become a financial master!

Probably the first time you received money was through your family, whether it was a birthday present, a reward for your good grades or your first pocket money - whatever it was, it was your introduction to the financial world.

But the turning point is when you buy something with your own hard-earned money for the first time. Then you start to realise the freedom of having your own finances. But how can a young person like you make money, you may wonder. Sometimes all it takes is a little creativity.

The first money

The weekly or monthly pocket money given by parents is probably the first money you got. In some cases, this pocket money was conditioned by the grades you received at school, whether you helped with the housework, and so on, but why?

Receiving pocket money is great per se, but it’s also a great learning opportunity. You get to understand the value of money, how to handle it responsibly, and how to plan, save and invest it.

Were you also one of those who organised a local market to sell your toys and earn your first money? How did you feel when you saw the result of your work? Was it easy for you to spend that money or did you have to think a lot about it because you didn’t want to waste it after so much effort?

It is important to be aware of where the money comes from, and that it is necessary to work to get it. That's probably why you feel so fulfilled when you earn money for the first time on your own.

Tips for making your first money:

• Second hand market or online applications. Sell things you no longer need in a second hand market or online.
• Sell homemade food or handicrafts to neighbours / friends. A good way for instance to collect money for a school project or, as a scout, to finance your summer trip. 
• Run errands for relatives in exchange for money.
• Work as a babysitter or pet sitter

You can also take advantage of new technologies and use them to earn some money. You can for instance: 

• Create a Youtube channel. If you achieve a high number of subscribers and viewers you can earn money with your videos.
• Sell stock photos and videos online, if photography and videography are your passion,.
• Be an (online) tutor or teach others how to use technology (or any other field you are good at)
• Take part in (online) surveys. Universities are often looking for participants. 
• Test games. You can earn money being a 'game tester', but for this you will need certain programming skills.
• At the legal age, you can also have a part-time job or a summer job.

When you are over 18 years, other options are open such as working as a shop assistant, in a supermarket, helping on a farm, selling tickets in a cinema or as a waiter in a café. At this age, it's possible that you will earn a bit more money and you will be free to decide what to do with it. It is not the same for everyone, some will earn their money earlier and others later, the important thing is to be aware of its value and be responsible with it.

And remember… when money seems too good to be true, well it’s maybe the case. Be aware of scams! Nowadays, with the Internet, there are many people who try to take advantage and cheat people out of their money and personal data, so you should always be on your guard. For example, this happens with jobs abroad, where you are promised wonders, or the videos/emails promising tips “to make easy money”.

If you find a good offer but have doubts, do a quick search on the website of the company offering the supposed job to see if anything suspicious comes up and never give out personal information until you are sure. Make sure to visit the Eures Portal if you plan to work abroad. 

How to save money?

If there is one thing to emphasise, it is the importance of saving and although it may seem difficult at times, believe me, there are always a few tricks.

The most basic way to save is to prioritise. We all like to buy new shoes or have the latest model of a mobile phone, but do you really need it? Here are seven tips to bare in mind:

• Always have a savings fund, so that if one day your mobile phone breaks, for example, you will have money to repair it or to buy a new one.
• Pay attention to small daily expenses. Buying your coffee every morning may not seem like a big deal, but at the end of the month it is a major expense. So why don't you take your coffee from home? At the end of the month you will see how much money you have saved with this small action.
• Keep the coins from your wallet in a jar and little by little you will see how much money you accumulate.
• When you go to an event, a museum or a concert, check if they have a discount for students or young people, this can save you a lot of money.
• Buy only what you need and don't be tricked by special offers. Also, use everything you buy, like this you also avoid wasting.
• Before you buy something, think if there is a relative or friend who has it and is not using it, maybe they can lend it to you, you can exchange it for something, or they can even give it to you for free.
• Use cash. With cash you can see better how much you spent and can better regulate.

Tips to avoid debt

Be responsible and never spend more than you have.

To stay out of debt, saving money is a must; you already know the importance of having a savings fund. Here are some additional tips:

• Never throw away bills or reminders, and keep track of your money, how much you spend and on what (cool apps exist for that).
• Don't get into credit card debt, read the terms and conditions and contracts carefully and always stick to deadlines and payment dates.
• Keep an eye on your expenses and write down from whom you are borrowing how much money, what fixed costs you have per month and how much money you can still spend.
• Keep track of all your online subscriptions and cancel them if you are no longer interested as most of them are renewed automatically every month.
• Beware of consumer loans (with high interest rates!). Monthly costs accumulate and often end up in a debt trap.
• Finally, avoid spontaneous shopping, buy only what you need and compare offers to always get the best deal, and don’t let advertisements trick you.

What is the EU doing?

Having good knowledge of financial literacy can help everybody to make better decisions and use of their money, which can help them also to plan for their future.

The European Commission believes that sound financial literacy is at the heart of people's financial well-being. This is why, together with the OECD, it is working to develop joint ‘financial competence frameworks’ for young people and adults.

These frameworks will set out the knowledge, skills and behaviour that someone needs to develop to ensure their financial well-being throughout their life. For example, planning a budget, investing or borrowing money.

Sources

Some of the content was inspired by Eurodesk Austrian “ Financial Education for All” campaign (only available in German).