By: Niki Karayianna, 1st year student in the Department of Accounting and Finance, University of Cyprus

Have your debts ever been too high, and it felt like nothing could be paid off? Did you ever wonder why?

Well, some common reasons are: no monthly budget, overconsumption, and no emergency fund.

Here in Cyprus, most of us are usually looking for the biggest house. But we never actually consider if we can afford the monthly loan payment until our retirement, or what money will we have left for our retirement!

We will be left with our partner in a big house that we no longer need. The expenses will be too much that we will be forced to cut down other costs such as going out and consuming.

Which brings us to another issue here in Cyprus: credit cards.

People tend to buy things on credit, because they don’t hold enough money. And that leads them to not being able to repay the card payments, resulting in endless interest payments. They may buy things for now, but they have tied up their future income.

For me, a credit card is a never-ending cycle of buying now and paying more later. And I think it is best to avoid it, because it can get out of hand easily.

All this leads us to one simple thing: we should all create a monthly budget.

By that, I mean write down our income and our expenses and see how much money we can spend. Then prioritise what matters most to us and make relevant decisions.

Now, it is important that we save even a small amount every month and create an emergency fund that covers at least three months of our salary, in case – for example – job loss.

I strongly believe, we should think ‘smaller’ and not be so focused on buying the most expensive and latest things. Maybe we should think about the long-term good of our family so that our children are raised in a household where arguments about financial problems do not exist.

‘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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