10 Harsh Money Lessons That You Never Learned in School

“They should teach personal finance in college.”

“I wish I learned more about money in school instead of studying all that useless stuff.”

I’ve seen a variation of this message on social media over the years. Personal finance is one of those topics that we have to figure out on our own as we go through life, and it can be highly frustrating. This is why I wanted to look at what you likely weren’t taught about money as a high school or college student that you should know.

Here’s what college and high school never taught you about money that you need to know.

I can’t tell you how many times a reader or friend complained about how they learned nothing about finances in school. You have to figure out credit scores, mortgages, credit cards, investing, retirement planning, budgeting, being able to afford a Friday night with soaring inflation, and career advancement all on your own.

You don’t learn much about personal finance and money management as you go through the education system. You go from trying to get by as a broke college student to being thrust into the real world, where you suddenly have to worry about paying your bills, all while trying to figure out how to balance between saving for your retirement one day and trying to afford all of these weddings that you have to attend.

Let’s go over what every young person should learn about money right now that you probably won’t learn in college or high school. These are ten money lessons that should be taught to all young people.

Lesson #1: The world is designed to separate you from your money.

“I firmly believe that everything in this world is designed to separate you from your money.”

An economics professor dropped this gem on us one morning (so I technically learned this in college). Since hearing this, I can’t stop thinking about it because it’s accurate. He described how everything is happening around us to take our money.

There will always be something to spend money on. You can’t scroll social media for more than two seconds without being sold something. There are ads for everything, and the ads are targeted to promote something you likely discussed an hour earlier or thought of in your mind.

What can you do about this?

• Save first. Always pay yourself first. Have money automatically come off your paycheck. Don’t attempt to save when you don’t spend after getting paid. Save first.
• Hide/lock your money. I call this the Houdini System. I hide my money in an investment account and ensure I cannot access it.
• Stop saving your credit card details with every online retailer. It’s ridiculously easy to spend money these days. Don’t save your credit card information with Amazon. You don’t always need everything delivered to you in minutes.
• Set priorities. I’ve learned that you can have anything you want, but you can’t have everything you want.

Whatever you do, never rely on willpower. Hide your money and set it aside. The world is designed to take your money from you. On top of finding ways to keep more of your money, you also have to ensure that you don’t get scammed. The video below covers this…

Lesson #2: You must figure out where your money’s going.

“I have no idea where my paychecks go.”

I’ve heard this from many friends over the years, and it’s always startling. I understand why this happens, though. Life comes at you fast, and everything that you want to do is expensive. Suddenly, you’re a week removed from payday and have no idea where your money went.

You don’t have to track every penny, but knowing where your money’s going is essential. You don’t want to be confused as to why you’re broke. You have to figure out where your money’s going. 

How do you figure out where your money’s going?

1. Look at your fixed expenses. What are your fixed expenses like? This includes all the costs you must pay to live (mortgage, rent, utilities, cell phone, insurance, etc.).
2. Go over your spending to find your problem areas. The good news is that your banking account likely has a mobile app that tracks everything for you. My banking app even puts my spending into categories. It’s important to review our spending at the end of the month to see where most of your money goes.

Nobody will care about your money. It’s your job to figure out your finances. If you don’t know where your money’s going, you’ll never be able to save any and will always be broke.

What if you don’t make enough money? In that case…

Lesson #3: It’s on you to increase your income.

• “I’m not making enough money.”
• “I don’t get paid much.”
• “I work too hard for too little money.”

Most people I speak with just aren’t making enough money.

However, here’s the harsh reality: there will never be a time when an employer wants to pay you what you’re worth or more than they have to. You have to ask for it.

Nobody’s in a hurry to give you a raise or to pay you more money. Nobody will show you how to make more money (unless they sell you a course or something). It’s YOUR job to figure out how to make more money.

How do you make more money?

• Find a profitable niche/field of expertise. High schools/colleges should critically examine the cost of the degree vs. the salary expectations in the field. The good news is that it’s never too late to switch career paths or explore a new area of expertise.
• Upgrade your skills. You may just not have enough marketable skills, and you must find ways to upgrade these skills.
• Get a part-time job. Sometimes, you have to put your head down and put the work in. There will be times when you have to do whatever it takes to make more money.
• Look into side hustles. Most young professionals have side hustles these days to try to keep up with inflation. This can feel overwhelming, but a side gig can make you good money in your spare time.

There are many ways to increase your income. Unfortunately, you have to figure out how to do this independently.

What if you currently don’t have the means to increase your income?

• You can try dog walking on Rover.
• You could switch jobs because maybe you’ve peaked at your current company.

Lesson #4: You have to spend money continuously on improving yourself.

“I was thinking about buying that book, but I wasn’t sure if it was worth the money.” — a friend who I’ve seen buy $15 drinks without flinching

You have to spend money today to make more of it back tomorrow. Being cheap with yourself will hold you back in life. You have to get into the habit of investing in yourself today to have a better tomorrow. One thing that the educational system focuses on is more formal education. However, there are many ways to invest in yourself and to learn more than being in the educational system.

How can you invest in yourself?

• Books.
• Courses.
• Any chance to upgrade your skills.
• Attend events (conferences, industry meetups, masterminds, and so on) to meet new people.

You have to get into the habit of investing in yourself. Nobody will invest in you or try to help you if you don’t invest in yourself. It’s on you to do what’s best for your situation.

Lesson #5: Your bills won’t go away if you ignore them.

Handling bills is a serious issue for some young adults. You can’t ignore your problems, and you certainly can’t run from your bills. You have to stay on top of your bills, or they could be a serious problem because interest rates and late fees can add up really fast.

This also applies to paying back any personal debts that you have. If you borrow money from someone, you should make it a priority to give it back.

How do you simplify the process of handling bills?

• Automate your payments so that you don’t have to make any payments. You have enough to think about. You can’t rely on the fact that you’ll remember to pay every bill on time. You want to automate this process so you don’t get charged late fees.
• Go over your actual statement to ensure everything’s okay. Even though your bills are automated, it doesn’t mean that you shouldn’t go over them.
• Negotiate always. You can negotiate everything in life. Contact your service providers and ask for a better deal. I called my cell phone company and got more data for less (I post frequently).

Staying on top of your bills is an essential skill that isn’t taught. We can’t ignore our financial obligations.

Lesson #6: You have to save money for a rainy day.

Life happens, and things go wrong when you least expect them to. I learned about the importance of saving for a rainy day when I was driving home from the library in college. My car slid on a patch of ice and hit the curb. There was one problem, I was borrowing my Dad’s car, and he needed it for work the next day. Luckily, my best friend at the time was a mechanic, and he was able to work on it. Fortunately, I had some cash to handle this emergency expense without my dad realizing that I couldn’t be trusted with driving.

One unexpected expense can derail your financial goals entirely if you don’t have the money to handle it.

In the personal finance world, this money you save is often called an “emergency fund,” but you can call it whatever you want.

Here’s how an emergency fund has bailed me out over the years:

• My car broke down in the winter.
• Well, the whole year of 2020.
• I’ve lost freelance jobs unexpectedly.

You have to save money for a rainy day because you never know when a rainy day can turn into a rainy year.

Lesson #7: There’s no such thing as “easy money.”

“JOIN THIS PROGRAM TO MAKE $10,000 MONTHLY WITH VERY LITTLE WORK INVOLVED.”

You see some guru promising the world about making money without effort everywhere you turn online these days. When you first start getting into personal finance, you’ll likely hear about various get-rich-quick schemes first. The sooner you accept that there’s no such thing as easy money and that you can’t get rich without effort, the sooner you can focus on getting your finances together.

I don’t know what to say, but if it was that easy, don’t you think more people would make thousands by doing nothing? If someone found the answer to getting rich quickly, would they be so quick to give away the formula to strangers?

Unfortunately, some of the brightest folks I know get caught up in schemes. The allure of easy money seduces even the smartest person. We could have another article about investing (penny stocks, cryptocurrency, NFTs, and so on) and the various schemes involved. For the sake of space, I want you to know that there’s no such thing as easy cash regarding income or investing.

“The hunger for the magical shortcuts and simple formulas for success has been a constant throughout history. But in the end all of this searching is centered on something that doesn’t exist.” — Robert Greene

Lesson #8: You have to deal with taxes.

Taxes are a part of life that we all struggle with. I could go into an entire tax tangent, but there’s not enough space here.

Whether you like it or not, you have to deal with taxes. You absolutely can’t avoid them.

There are ways to limit what you spend on taxes, and there are strategies here. All I’ll say is that you have to find a way to deal with this because taxes won’t just disappear.

Here are a few other things that school doesn’t teach you about taxes:

• You have to find ways to save money on taxes on your own.
• You always have to factor in taxes when making any additional income.

As frustrating as it is to see so much of your money go towards taxes, this is one area of life that you can’t avoid.

Lesson #9: You have to find ways to have fun on a budget.

I’m 100% all about having fun, and I would never lecture you because you want to have a social life or don’t want to stay in all the time. The struggle lies in figuring out how to do this on a budget. You want to live your life but don’t want to spend all your money trying to have a social life. The struggle is real. Personal finance will often be a battle between YOLO and trying to save for the future.

I’ve seen far too many young people go broke because they wanted to have some fun. I’m all for letting loose and enjoying life. I don’t want to see you spend all of your money.

How does one have fun on a budget?

• Find hobbies that can give you something to look forward to. One thing that will bring you joy is having fun hobbies that provide you with something to look forward to. Your entire life can’t revolve around just working and then coming home to complain.
• Plan epic experiences. I’ve learned that I don’t need to go out every single weekend to have a fun life. I don’t mind staying in and being low-key. I want to plan epic experiences, from trips to adventures.
• Know your budget. When you first start going out, you’re going to want the full experience. It’s tempting to always want to treat yourself. You have to work with what you have until you increase your income.

Lesson #10: You have to work on your social skills.

“It’s not what you know; it’s who you know.”

We’ve all heard some variation of this quote before. We don’t know what to do about it. The topic of your social skills is rarely discussed. If anything, we only complain when someone at work gets promoted because management likes them more in our eyes.

How awkward is it when someone messages you to meet up to network? You’re not even sure what that means. You’re just living your life then some stranger wants to network. You’re unsure if this is a good or bad thing.

The one thing that college doesn’t even touch upon is the idea of social skills. I’ve seen many careers ruined due to poor social skills. I’ve also noticed that many people will stop working on their social skills and personalities. You shouldn’t be the same person at 35 that you were at 18.

How do you work on your social skills?

• Read books on the topic.
• Become more interesting.
• Go to more events.
• Try to make new friends.
• Actively work on your social skills.

“Success in any field, but especially in business, is about working with people, not against them. You need to build bridges, not walls, if you want to achieve your goals.” — Keith Ferrazzi

Must-read articles:

• How-to prepare your finances for a possible recession.
• How you can increase your income.
• Everything you need to know about investing.

Those are ten things you didn’t learn about money management in high school or college. What would you add to this list?