Money Lessons You Need To Know But Didn’t Get Taught

Do you ever step back and think, I wish I knew that when I was younger?

I bet you do. We all do.

Hindsight is a wonderful thing, as the saying goes.

Like many people I have learned the hard way the financial basics of managing my money and the money lessons we all need to know.

Finance lessons like don’t get into debt (I did) and being broke.

Make the right financial decisions for your life (I didn’t) about saving money, education and what I spent my money on.

It’s not that I didn’t have good money role models. I did. And I know now how lucky I was to have them.

But like many people I thought I knew better.

I wanted to do what my parents didn’t precisely BECAUSE they didn’t.

Sound familiar?

And the pattern is repeating itself. Both my daughters think I am tight – I’m not, I’m frugal and proud of it.

Because they see me as tight, and they don’t want to be, they are determined to do things differently to me.

And where has it got them? In debt. Living beyond their means. And worrying about money.

And I feel responsible.

Because having learned about personal finance I am now pretty darn good with my money, so how can I not have instilled the financial basics into them as well?

So these money lessons are for you dear daughters and for everyone reading.

Try not to rebel against them.

They are tried and tested.

Not just by me, but by millions of the older generations who have finally got their sh*t together.

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Money Lessons You Need To Know But Didn’t Get Taught

In my defense, my daughters have got the financial basics.

They do know some of the finance lessons I have banged on about but they are doing exactly what I did.

They are choosing to ignore these finance lessons precisely BECAUSE I have tried to teach them.


There is a saying that goes something like this: – “if you fail to plan, you plan to fail.”

Your budget is your plan for your money. Without it you don’t know where your money is going.

You have no plan for your future finances and you are stuck in the cycle of living paycheck to paycheck.

I know budgets are not sexy but honestly they do work.

OK, they work if you keep tweaking them till you’ve made them work.

I don’t know anyone who got their budget spot on first time.

Your budget will help you understand your money, your expenses, your spending habits.

When you have them nailed, you are on the way to being able to really focus on your future financial goals.

Money Lesson ONE – Create a budget that works for you.

And if doesn’t work first time, don’t give up! Tweak it and budget again.

Tracking what you spend is an enormous help in understanding your spending habits.

Budgeting posts that can help:

How To Budget Your Money When You Don’t Know How

How To Live Fabulously On A Budget (And Save Money)

How To Survive, Thrive And Save Money On A Tight Budget


money and budget word on wooden desk background

Emergency Funds

I don’t know about you but I have found selling the benefits of a rainy day fund to my daughters when they feel strapped for cash very hard.

If you don’t have any real spare money, and your young, healthy and want to enjoy yourself, putting money away for some far off, hazy negative life event isn’t very appealing.

And I get why it isn’t.

But seriously, an emergency cash account or two will keep you afloat in the hard times and stop you worrying about money in the good times.

Money Lesson TWO – Ensure you build up an emergency fund of at least $1000 ASAP. Then build it up further.

Credit Cards Are Not Free Money

Credit cards have the wrong name.

They aren’t ‘credit’ cards, they are debt cards.

If you don’t pay off your credit card in full you have created a debt that is going to cost you money.

Credit cards help to perpetuate the YOLO school of thinking.

You fall into the trap of thinking you can afford to buy it now rather than save up for it.

And that ain’t good. Overspending now and going into debt will cost you later.

Money Lesson THREE – never use a credit card unless you pay it off in full every month.

3 glass jars with coins in

Always Live Below Your Means

Living below your means is the number one thing everyone should do, no matter what you earn.

If you aren’t living within your means then it means you are living beyond your means and going into debt.

Yet living below your means seems to have fallen out of fashion. It certainly has with my daughters.

With the rise of our instant culture, YOLO and constant social media updates you can be forgiven for feeling that it’s normal to have everything you want straight away, regardless of the cost.

50 years ago you didn’t have access to credit and therefore the debt you might have was small (apart from mortgages – which were also small).

Living below your means doesn’t mean you must scrimp and scrape pennies together.

It just means you spend less than you earn and leave a small amount left over.

That left over amount is your emergency fund and your wiggle room for when you have an extra bill to pay.

If you want to spend more, you need to earn more.

Money Lesson FOUR – no matter what you earn, always live below your means.

Have Financial Goals

When you have goals, you have something to strive for.

There are many goals we have that we don’t give much thought to but they drive our behavior and help us achieve.

College exams, driving tests, job interviews are all goals that you will have pushed yourself to achieve and done what was necessary to do so.

Financial goals help you in the same way.

Creating goals for your money such as a vacation savings plan or your emergency fund or a house deposit gives you a focus that will influence your spending.

We had a long term goal of paying off our mortgage early. It took us 10 years to achieve but it shaped much of our spending habits during those 10 years.

Every time I saved money on something like renewing our car insurance, the savings went straight to the mortgage.

Because of this goal I actively looked for ways to save more money and scrutinized more than I might have done if I didn’t have this goal.

Financial goals don’t just have to be about savings though.

They can be about when you want to buy a house, how much you want to earn by the time you are 30 or 40 or even when you want to retire.

The most important thing is to create some goals and work toward them.

Money Lesson FIVE – create financial goals, short, medium and long term.

chalk board with money saving written and coffee cup - money lessons

Don’t Fall For Lifestyle Inflation

When you get your first job after college you can’t wait for your first paycheck.

You feel rich.

Too soon though and it’s not enough.

So getting a pay rise is great – more money to spend. Soon enough though it’s not enough.

This is lifestyle inflation. As your income rises, so does your spending.

Money Lesson SIX – save a portion of every pay rise. Do not live right up to your paycheck when you get a raise.

Related post: 15 Money Affirmations That Will Inspire Your Life

Having A Bad Debt Habit

My first job was in a bank and in my 3rd month I went overdrawn by a whole £30/$37.

I got hauled up before the bank manager for a talk.

As a bank employee going overdrawn without permission was deemed to be stealing from the bank’s customers.

Hand on heart I can safely say that I have never had an unauthorized overdraft since.

Even though I only worked in the bank for one year, that talk hit home very deep.

(I have of course got myself into debt in other ways but never, ever an unauthorized overdraft).

Debt is a money habit you do not want to adopt.

The problem is that it is almost impossible not to go into debt right at the very beginning of your financial life.

You take on student debt in order to get a good job on graduation. This debt takes years to pay off so you already have that habit.

Then you get a credit card to try and build your credit score.

When coupled with a busy life that credit card doesn’t get paid off in full every month and there you have it – a debt habit.

Student debt, because it is often necessary, is similar to a mortgage. I deem it to be good debt.

Not that you don’t want to pay it off as soon as you can, but it’s not something to necessarily avoid.

However bad debt is a different matter.

Bad debt is credit cards, overdrafts, car finance and personal loans.

Bad debt often costs more with higher interest rates and could be avoided most of the time if you make different life choices.

Money Lesson SEVEN – don’t cultivate the debt habit. Stick to good debt only and even then have a plan to pay it off.

neat line of piggy banks, calculator and notepad on desk

Pay Your Future Self First

This personal finance lesson took me a long time to learn.

The idea of putting money away for the future me in 40 or 50 years time seems far too distant to give any thought to.

After all I might die tomorrow! You know we all think this when someone asks us about our retirement plans and we are still in our 20s.

And I can totally understand why my daughters are not listening to me on this one.

But retirement has to be planned for, otherwise you’ll still be working in your 70’s and seriously who wants to have to do that?

By all means if you find something you love then keep working.

But you want the choice, you absolutely do.

Money Lesson EIGHT – As part of your budget and living below your means, always factor in saving for your future self.

Preferably in a tax efficient wrapper designed for pension planning so you cannot access it before then – too tempting otherwise!

If you Can’t Afford To Pay In Cash, Don’t

This is one of the money lessons that our grandparents knew so very well.

Because they didn’t have credit cards, overdrafts and the like.

And in some ways it is probably another of the most important money lessons you can learn.

If you want something you have to have the money in the bank or in cash, in order to buy it.

No putting it on your credit card with a vague thought that you might be able to pay your card off next month, maybe.

Applying this principle to all aspects of your financial life will help you immeasurably.

You will always spend within your budget, you’ll live below your means and you’ll have financial goals set up in order to pay for things you want in the future.

You also won’t have a debt habit and won’t treat credit cards as free money.

Money Lesson NINE – only buy what you actually have (real) money for.

girl with piggy bank and floating bank notes

Money Lessons For Us All

These are the lessons I wish I had taken on board when I first started adulting and I wish my daughters would embrace right now.

You know they make sense even if you might not want to learn them.

Take it from me, these finance lessons are the key to your future financial success.

Don’t think of them as ideas you are being told to do, think of them as money lessons you want to do. You will be thankful you did!

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Last Updated on 5th April 2023 by Emma

About Emma

I'm here to help you become confident in making the best money decisions for you and your family. Frugal living has changed my life, let me help you change yours.

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