Cyprus’ youth talks money: How to balance money in your 20s

By Drosis Louka

Economists argue that, due to impatience, our generation prefers to spend rather than save.

While there might be some truth in this statement, both saving and spending matter for different reasons – especially in Cyprus. The question is which should matter more in our 20s.

It is no secret that saving carries more weight at 20, as you gain the benefit of time – also known as compound growth. Savings at 20 have decades to grow and even small amounts can snowball. Moreover, saving not only gives you peace of mind, it also helps your brain adopt useful habits early on.

However, saving everything and living miserably is counterproductive.

The real financial flex at 20 is mastering the balance most people get wrong. You need to spend strategically by investing in yourself and specifically in hard skills, experiences, and health. These investments often have a higher return than money sitting in a bank account.

Ultimately, ‘saving or spending’ is entirely the wrong question. Instead, you should be asking how you can do both.

As a first-year student in the Department of Accounting and Finance at the University of Cyprus, here are some habits that have helped me save, even passively, without sacrificing my needs.

1. Follow the 50/30/20 Rule:

50% toward essential needs. 30% toward non-essential wants. 20% toward savings, debt payments, and investing.

2. Buy supermarket own brands.

A recent study conducted by my classmates and me for our Personal Finance class showed that even when you search through several supermarkets to find the lowest prices for branded products, a supermarket’s dupes are 15.4% cheaper on average, while still offering the same quality.

3. Take advantage of supermarket member discounts and loyalty cards.

Our study also proved that just using the member discounts can save you an additional 1.76% on your monthly basket.

The beauty is that while these tips produce a significant financial impact, they do not require a change of lifestyle. They just improve it. This way, saving and spending can coexist.

Drosis Louka is a first year student, Department of Accounting and Finance, School of Economics and Management, University of Cyprus

‘Cyprus’ Youth Talk Money’ is a Cyprus Mail series developed in collaboration with the University of Cyprus as part of the Financial Literacy Initiative, supported by XM. New student articles are published every Tuesday.

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