Being an adult and managing your finances can be a struggle for some of us. We all know that we should plan, budget and take care of money and our spending. But how many of us do it? We are supposed to rationalise each purchase and think upfront about whether we can afford something and whether we need the item we want to buy. Or is this purchase just a way of satisfying our infinite wants?

Most of us wish we learned about money before our 20’s so by the time we are 30 we have some savings, some investments and we understand how to manage the money.

We wish we didn’t make so many mistakes, didn’t waste hundreds of pounds on useless purchases. We wish they taught us more about money at school.

1.Why we cannot just print more money?

Money is not just printed out and given to people. And no, you can’t just print more money.

Even now a lot of people even after graduating from universities still ask the same question: – Why can’t we just print out more money?

The simplest way to explain it is an example with water. Imagine water becomes a currency: you have one water bottle- that is all you have and you value it because your life depends on it. Everyone else also has water bottles and you can exchange and buy things for them.

Now imagine, that now everyone realises that you can fill up a water bottle from the tap, so now you have infinite water bottles, you think you are rich you can afford anything in this world. However, the crucial part, is that everyone else now also has infinite water, water loses its value, no one values one water bottle anymore, so in reality, you are not rich, you just now need more water bottles in order to but the same thing as before… That’s what happens if you just print more money, due to inflation money loses its value.

2. Budgeting.

It is one of the most important aspects of money and managing your finances.

Think about that feeling when you are afraid of opening your balance in the bank account because you know you spent too much last night. Sounds familiar?

Imagine if at school you would have had lessons explaining what percentage of income you should spend on needs, wants, leisure, what amounts of money to save. If these simple things would be common knowledge, you would not fail so many times trying to keep up with your spending.

3. Money can be measured as a value of labour.

Each toy that is bought to you as a kid, every ice cream or piece of clothes. All of the little items you cried for at the store are bought because your parents worked for it a certain number of hours. The realization of the value of labour comes when you usually start your first job and realize that to go out and get that meal you used to get every Friday you need to spend 3 h serving customers at the café, not just simply ask mom for the money.

You wish you respected more the money your parent gave you. Again, as a child you think, that money is just printed out, you don’t exactly understand where is it coming from, and that you have to work hard for it. If schools would have taught you that, you would have been much more rational with your spending.

4. Poverty exists.

Some people have less money, while some people have more, but it is a harsh reality, that there are humans who do not even have money for food, water or shelter. Wrong financial decisions can lead to going bankrupt or losing your home. If you had that understanding in school, how people become homeless and what it means to earn less, then a minimum wage could have saved so many adults from making a wrong choice.

Additionally, it is important to help those, who need it the most. Money makes you greedy, but at the end of the day, it is important what is in your heart.

5. Don’t waste money, save it for a bigger fish

Don’t spend little amounts of money on 50 little things you will not remember you bought after a week. Save money and buy something valuable. Something that will last you longer is considered investing. It is very easy to do, by setting a financial goal for yourself. Consistently saving little amounts will pay off when you invest in bigger purchases.

6. Save, but don’t be cheap.

People who try to get the cheapest option and save as much as possible, usually pay twice.

Yes, you wanted to get the best deal, the best offer, it was the cheapest option. Unfortunately, very often the price is too good to be true, and you will eventually have to pay more by either buying a more expensive alternative or spending a fortune trying to repair a broken item.

7. Emergency Fund

There always must be an available fund to you for emergencies, whether it is to repair something or simply get a taxi from somewhere. But I remember hearing this from my close friend, her dad once told her to always keep an emergency note in her wallet. No matter where she would go. And I remembered this for the rest of my life. There always should be an amount that you don’t ever spend, but in an important situation, it will help.

8.Credit vs Debit

There is a difference between a credit and a debit card. In simple words, a debit card is what you own and a credit card is what you owe. No, the credit card is not a magical card that makes all of your dreams come true. That’s only how they show it in the movies. It is very helpful at certain times, however, you need to be very careful with your spending and rationalise payments from credit cards.

9.Debt and loans.

There is nothing wrong with having a loan or a mortgage. There is a certain stereotype that loans are dangerous or you should not ever get in debt. However, in reality, loans are very helpful sometimes, especially when investing in something very expensive like property or student education. You wish they taught you at school how the instalments are being paid and how the credits are being given to people. What is good debt and what is bad debt and how to pay it back? None of these ever explained to us and as a result, some people become victims of “fast loans” and are bound to pay big interest because they did not know what they were doing.

10. Wants and needs should be rationalised.

Again budgeting comes and helps here as well. You don’t want to buy a fancy coat at the beginning of the month and then by the end of the second week realise you have no money for food. Management of money should be explained at school because the chain of wrong financial decisions just leads to significant consequences you wish you could escape from. But sometimes it is too late.

11. Taxes.

There is part of your income that is paid directly to the government and you always need to remember that no matter whether you employed by a big company, or you are self-employed, or you just a part-time student who is tutoring someone at school- you have to pay taxes.

You wish during those maths lessons at school someone taught you how to calculate what amount of tax you are supposed to pay and how does it vary with different incomes. How often taxes supposed to be paid and all the important aspects you wish you knew before you started your job.

12. Pensions.

You would think why children need to know about the pension? They are just kids… However, a lot of people start to think about their pension only in their 40’s or even later and regret not starting to care about it earlier. If you would have known what are the pension schemes, when do you need to apply, what are the benefits and what exactly is a pension? Life would be so much easier, you would feel prepared and certain about your future decisions.

The more we learn about money as kids, the fewer mistakes we would make as adults in the future. By exploring to children how do banks operate, where the money comes from, what is money management we would be able to graduate from high school and be prepared for adulthood. Once you get a job you might not have enough time to research how to budget or how to apply for a loan. All these little, but important thing should be explained while we are willing to learn and have time for that. Additionally, money is such an interesting topic, and by improving financial literacy from a young age we could save so many lives and prevent so many wrong choices adults make.

Spend your money smart!

Thank you for your attention.

Lisa

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