Preparation for Financial Stability: Know Your Numbers
Ever checked your bank account and wondered, 'Where did all my money go?' You’re not alone. Most of us were never taught how to manage our finances—yet we deal with money every single day.
The first step toward financial stability is getting a clear picture of where you stand financially. This clarity will give you the confidence to take control and prevent those stressful moments of uncertainty at the end of the month.
Step 1: Track Where Your Money Goes
To get started, you need to know how much money is coming in and going out. This involves:
- Fixed Costs: Expenses that stay the same every month, such as rent, utilities, or subscriptions.
- Variable Costs: Expenses that fluctuate each month, like groceries, dining out, or entertainment.
Personal Example:
When I first analyzed my monthly expenses at the start of my studies, I realized I was spending €50 per month on bottled water. Since I drink water daily, the cost quickly added up. By switching to tap water—a safe and inexpensive alternative—I eliminated this expense entirely. This small change saved me hundreds of euros each year. After that, I started spotting other small expenses that added up—like subscriptions I rarely used. This simple step of tracking my spending helped me make better financial decisions.
Step 2: Spot Where You’re Wasting Money
After categorizing your spending, identify areas where you can reduce spending without sacrificing your quality of life. The goal isn’t to eliminate all non-essential spending but to align your expenses with your priorities.
Questions to Ask Yourself:
- Are you spending money on habits out of convenience or tradition? (e.g., using bottled water in my case)
- Are your variable expenses significantly higher than expected?
Taking a closer look can lead to practical decisions about what’s truly worth your money.
Why This One Step Will Save You from Financial Stress
Understanding your finances isn’t just about saving money—it’s about preventing stress and gaining control. For me, the motivation was simple: I didn’t want to worry at the end of the month about whether I’d have enough money left. Financial clarity lets you plan for the future while also enjoying the present without constant worry.
Tools to Get Started
Want to take control of your money? Start with this one step: track your spending. 📊
Here’s how:
✅ Use a spreadsheet 📝 → You can easily find templates online
OR
✅ Try a budgeting app 📱→ e.g. Finanzguru
OR
✅ Check your bank statements 📂 → Simply export them and review the data
Your First Step
👉 Take a few minutes today to list your income and expenses. Whether you open a note, grab a pen, or download an app—the important thing is to start!
The sooner you see where your money goes, the sooner you’ll be able to take control of it. Once you see the numbers, you’ll feel more confident making decisions about where your money goes—and you’ll be one step closer to financial stability.