A money lesson I learnt in Prague

With the cost of living rising, many people's budgets are feeling the squeeze. Here's one approach that may be able to help.

3 min read

Prague is a beautiful city of cobblestone streets, baroque castles, dreamy bridges and medieval squares. But it’s also a place where I learnt a valuable money lesson.

The year was 1998, and I was backpacking through Europe, exploring the sights and taking in the culture.

A week before arriving in Prague I had hurt my back due to the weight of my backpack which had become increasingly heavy because of my accumulation of souvenirs.

On arriving in Prague, I was starting to experience intense pain, and I had to do something about it.

So, I emptied the contents of my backpack onto the bed, and started sorting through everything, with the goal of reducing the weight.

I started with all the pockets of my jeans and shorts, and took out numerous brochures that had accumulated along the way. I had also amassed coinage from every country we had visited, so these coins were earmarked for donation.

I had brought two belts with me from Australia, but I really needed just one, so the oldest belt went into the ‘to be disposed of’ pile in the middle of the bed. I had some old socks that I hadn’t worn, so they too joined the growing pile. I had a big towel, which I cut in half as that was all I needed at that point, and I also added an unused hand towel and shirt to my ‘not needed’ items.

The process went on until everything that I didn’t need (or want) was in a pile in the middle of the bed. I picked up that pile, and to my surprise it was heavy. I then reloaded my backpack with what I had decided to keep, and it was significantly lighter. The plan had worked, and my back was much better as a result.

So, what was the money lesson?

Money Lesson

As we know, times are tough, and almost every item in our budget is now higher. As such, many of us should take a close look at our budget to see where savings can be made.

With my backpack, on an individual basis, each item didn’t weigh that much, and the removal of just one item wouldn’t have made much of a difference to the overall weight of the backpack.

However, when all the items for removal were added together, the weight savings became significant.

It’s the same with money. Perhaps we might think that a saving in one area of our finances won’t make much of a difference. But if we add that one saving to many other savings across all areas of our budget, the difference can be significant.

Good money management isn’t just about buying good investments. It also involves having a budget, so that we know exactly how much money is coming in and going out. Inspecting this budget closely can help us identify savings, which can provide us with that much-needed breathing space.

Ways to save

The first step is to have a budget. Then look through all your expense items to see if there are any easy ways to save. Here are 10 suggestions, but there are many more.

Do you have multiple streaming services? Maybe cut back to just one or two.
Are you on the best gas and electricity plans? Find a comparison tool and look for better deals.
Do you leave lights or other devices unnecessarily on in the house?
Do you buy multiple cups of coffee each day? Maybe cut back to just one cup a day, or make your coffee at home.
Have you always wanted to eat healthier or cut back on your alcohol consumption? Now could be that time. And it will benefit your health and your hip pocket.
Do you have high-interest credit card debt that could be paid off with low-interest savings?
Can you cut back on takeaway meals?
When purchasing, can you buy the same item cheaper elsewhere?
In the supermarket take advantage of specials. For your everyday grocery items look for brands that are cheaper (but still good quality). Buy in bulk where you can.
Delaying spending on discretionary items is also another way to save money.