We learn a lot in school, but the real life practicality of said learning can leave a lot to be desired. We asked a money expert to give their two cents on the financial lessons they wished we knew earlier.
Many of us leave school knowing how to calculate algebraic equations but without any real understanding of the basics of personal finance. Managing money is a skill that influences every aspect of life, yet financial literacy is often overlooked in formal education.
As financial advisors, we see the same financial pitfalls repeated time and time again, pitfalls that could have been avoided if only the right knowledge had been instilled earlier.
Here are some of the most important financial lessons we wish were taught in school.
1. How to budget and manage expenses
One of the most fundamental skills that everyone needs is basic budgeting. Yet, many people enter adulthood without knowing how to track their spending or manage monthly expenses. A simple 50/30/20 budgeting rule can help:
- 50% of income goes toward necessities (rent, food, bills)
- 30% for wants (entertainment, dining out, shopping)
- 20% toward savings and debt repayment
Using one of the many budgeting apps available from most banks or Revolut can make this process easier. If students learned these basic habits earlier, they would have better control over their finances from the start and their journey to financial freedom would be less of a bumpy ride.
2. The power of compound interest
One of the most valuable lessons young people should learn is how compound interest works. Albert Einstein famously called it “the eighth wonder of the world” because of its ability to grow wealth exponentially over time.
Example: If you save €100 per month from age 20, assuming a 5% annual return, you would have around €150,000 by retirement. However, if you started saving the same amount at age 40, you’d have less than €50,000.
This lesson underscores the importance of starting early with investments, whether through pension contributions, savings accounts, or investment funds.
3. Credit cards and debt management
Many people learn about credit the hard way: through high-interest debt. While credit cards can be useful, failing to manage them properly leads to huge financial trouble.
Example: A credit card balance of €1,000 at 20% interest will double in five years if only the minimum payment is made. Understanding interest rates, late fees, and the importance of a credit rating should be a core part of financial education.
The best approach here is to either avoid credit cards altogether or use them only for purchases you can afford to repay in full each month. This builds a positive credit history without accumulating unnecessary debt.
4. The basics of investing
Investing is often seen as something only wealthy people do, but it is accessible to everyone. Schools should teach the difference between:
- Stocks (owning part of a company)
- Bonds (lending money to a company or government)
- ETFs (Exchange-Traded Funds, ie, a mix of stocks and bonds)
- Pensions (long-term investment for retirement)
Many people delay investing because they think it’s complicated, but various online platforms have made investing easier. Even contributing regular small and consistent amounts to an investment fund early in life can make a huge difference over the long term.
5. How taxes work in Ireland
Understanding the tax system and how it works can save thousands of euros over a lifetime. Many young adults enter the workforce unaware of:
- The PAYE (Pay as You Earn) tax system
- PRSI (Pay Related Social Insurance) and USC (Universal Social Charge) taxes
- Tax credits and reliefs (such as medical expenses, pension contributions, and rent relief)
- Self-assessment tax for freelancers and business owners
Example: An employee can greatly reduce their tax bill by claiming tax relief on pension contributions. Learning how to navigate Revenue.ie and track tax deductions could prevent costly mistakes later in life.
6. Emergency funds are essential
Life is unpredictable, and financial setbacks like losing a job or unexpected medical bills can happen at any time. Many people are generally unaware of the importance of having an emergency fund in place and this is so essential in terms of preventing people from falling into debt during tough times.
The general rule is to save 3-6 months’ worth of expenses in a separate deposit account with the best available interest rate available.
7. Understanding insurance and protection
Many people do not consider insurance until it’s too late. Schools should teach the importance of:
- Health insurance (to avoid large medical bills)
- Income protection insurance (to provide financial support if unable to work)
- Life insurance (to protect dependents in case of unexpected events)
Having appropriate protection in place is very important and can provide crucial financial security, but the right coverage depends on personal circumstances ,so always consult with a financial advisor.
8. The true cost of owning a home
Buying a home is a major financial decision, yet many people go into it without knowing exactly how it all works and all the costs involved. Schools should cover:
- Mortgage interest rates and how they affect repayments
- The hidden costs of homeownership (insurance, property tax, maintenance)
- How to qualify for the Help to Buy Scheme or First Home Scheme
Example: A €300,000 mortgage at a 3% interest rate over 30 years could cost over €150,000 in interest alone. Understanding mortgages earlier would help people make more informed decisions about buying vs. renting.
9. Planning for retirement early
Most people in their 20s do not think about retirement, but starting early makes such a huge difference. A person who starts contributing €200 per month to a pension at age 25 will have significantly more at retirement than someone who starts at 40. The Irish government offers very generous tax relief on pension contributions, meaning you get more for your money.
Check your options with a financial advisor and they will help you find a pension plan that suits your personal requirements.
10. Why financial advice matters
Even with basic financial knowledge, having a financial advisor is key when it comes to long-term financial planning, tax efficiency and creating investment strategies for long term wealth growth and protection. It is so important to gain control over your finances as early as possible and make informed decisions about your future. Whether it’s planning to buy your first home, investing wisely, or optimising your taxes, the right financial guidance can save you money and stress.
If financial literacy were a core subject in school, many people would enter adulthood with much better money habits and avoid making common financial mistakes.
Budgeting, investing, tax planning, and understanding financial products should not be lessons we learn the hard way. I strongly believe that including compulsory basic money management learning in the Irish secondary school curriculum would ensure that young people gain the knowledge, strategy and confidence they need to make the most of their money and enjoy much more positive long term financial well-being.
Carol Brick BA QFA PIB is the managing director of Contracting PLUS Financial and HerMoney Ltd. A UCD Economics graduate and Qualified Financial Advisor (QFA), she began her career in Financial Services over 25 years ago, and for the past 18 years, Carol’s primary focus has been on the provision of advanced financial planning advice and solutions to a wide array of clients.
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