7 Money Rules Schools Won’t Teach You

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I went to school for many years, and although I earned valuable lessons and skills to thrive in the real world, I learned very little about finances and important money rules. After school, the reality of life hits you hard, and you wish you were prepared enough for it.

Most high school graduates know that the cell is the basic unit of life, yet have zero ideas about the difference between stocks and bonds. They can recite all the laws of Physics but have no clue how to budget their income and track their spending.

We are all a product of these lapses in financial education. We accrue debt on expensive student loans, take high-interest credit cards, live beyond our means, and make wrong financial decisions. As a result, we often get frustrated and depressed when we cannot achieve financial freedom.

The good news is that we now have a lot of financial platforms like my Youtube channel, The Bulletproof Life blog, and many more online resources. These platforms have made it easier than ever to learn about personal finance.
In this post, I share some important money rules that you did not learn in school;

#Rule 1: Property is wealth

If you want to build wealth, you need to own property. Generational wealth requires you to own property. Sadly, we are in a time where many people are renting by choice because a lot can only afford to rent. 

Let getting on the property ladder be one of your goals in the coming year. Property gains value even while you sleep because the land is a finite, limited resource.

I have seen properties on Zoopla and Rightmove sold for 100,000 pounds 15 years ago; this year, those properties are going for 350,000 or more. This needs to be taught in school. 

One way to secure your future and create generational wealth is to get on the property ladder. Do this by buying the property you can afford.

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You don’t have to own a 5 bedroom or buy your dream house now; you need to buy a place you can afford in the neighborhood that you can afford it. 

Many people are renting in London and other premium locations where even though the rent is affordable, buying is out of it entirely because the properties are super expensive.

I advise these people to move away from the premium neighborhood to a less-premium area where they can easily own property.

If you are renting right now and think getting on the property ladder is entirely out of your score, you need to add it to your money goals and work towards it.

There are Lifetime ISA (LISA) and help-to-buy schemes to support you. Buy a smaller property, and you can later scale up by selling it off to buy a bigger one.

#Rule 2: Compound interest

Nobody teaches compound interest in school unless you are a student of accounting or mathematics. We only learned simple interests. Those who didn’t do an accounting course or mathematics at the senior level are only aware of simple interest. 

Compound interest is the magic that we need to be mindful of when investing. It is when your interest earns interest. Warren Buffet said, “those who understand compound interest benefit from it while those who don’t pay it.

When you understand compound interest, you will seek to invest in a place where it will yield interest. 

When your interest yields interest and that interest yields another interest, that is compound interest. This means your money makes more money for you. Compound interest takes your money from aww to wow; it takes your money from 10 pounds to 100 pounds. It is why you need to start investing in investment instruments that have compound interest.

If you understand compound interest, you will stay away from credit cards with high-interest rates. This is because your lender grows interest from your borrowed money the same way investment grows interest. 

As far as the lender is concerned, you are the investment, and they enjoy compound interest from your money.

#Rule 3: Emergency fund

Having an emergency fund is another thing they do not teach in school. Emergency funds stop you from dipping into your savings when your car needs new tires, your boiler spoils, or you need to make an unplanned trip. In addition, it prevents you from liquidating the investment you just made.

Once you do not have emergency funds, you will dip into your savings, go into debt, and take on credit cards just in case. Most people who take on a credit card, just in case, usually have no emergency funds. You do not need a credit card if you have emergency funds.

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If you don’t have an emergency fund, start building one now. It should be 3-6 months of your basic expenses.

Rule 4: Budgeting and Cash Flow

If you don’t have a budget for your money and you don’t know your cash flow, your money will go anywhere. If you don’t tell your money what to do and where to go, it will go where it likes. Learn to control your money so it doesn’t control you. 

Knowing the basics of budgeting is such an essential money rule. Unfortunately, nobody teaches these things in school, but they are crucial to our financial well-being.

Budgeting is a plan for how you are going to spend your money. If you are not budgeting your money, your money is not being the servant it needs to be to you. You can only make your money grow and work for you if you are in control.

#Rule 5: Saving

Without savings, you cannot invest, and without investing, you cannot grow wealth. If you don’t grow wealth, you cannot prepare for the future and enjoy the dream life you want. 

You need to save. Saving is a money rule that should be taught in school. It would help if you learned how to save money quickly, even when you have no money. Life brings troubles, but you will thrive with a good saving habit.

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Rule 6: The Debt Spiral

The debt spiral is when your debt starts to spiral like a snowball rolling down the hill. It grows bigger and bigger as it takes on more snow. The debt spiral is when your debt accumulates against your wish. 

Back in school, we all assumed debt to be when you borrow money and decide to pay it back in bits. But we should have been taught the debt spiral phenomenon.

The debt spiral starts when one minute, you are leasing a car and paying in installments, and the next minute, you purchase a bag and pay for holidays on your credit card. Then interest keep climbing, and you start to struggle to keep up. 

To make matters worse, you may have applied to a microlender for a pay-day loan with a 5% monthly interest rate which means 60% interest per annum. This interest begins to grow and grow.

You may have bought one or two things you are not supposed to purchase or taken a loan to start a business, and the business went wrong. 

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Then the debt spiral can make you depressed, and you don’t know how to get out of it. So your debt can spiral if you do not keep an eye on it. It can go from zero to a hundred before you know it.

#Rule 7: Live Below Your Means

Living below your means is one rule that even though the school doesn’t teach, our African parents taught us. They emphasized the need to cut our coast according to our sizes. Live a Primark life if that’s what you can afford. 

Stay away from a Prada life on a Primark budget. If you’ve been unlucky to hear this, let me reiterate that living below your means is a crucial money rule. 

You can’t afford to earn 2000 pounds and spend 2500 pounds. You can’t even afford to spend 2000 because that is living on your means.

The rule is to live below your means. Spend less than you earn. Let there be that little extra that you will save, invest and keep for emergencies. You can’t predict life because it can come at you fast; when it does, saving and emergency funds can help you bulletproof yourself from what life throws at you.

Till next time,


Ronke O.

Published by ronkeodewumi

I am a Chartered Accountant (ACMA, CGMA) and seasoned Management Consultant with about 16 years of experience driving the delivery of strategic solutions to complex problems of global firms. Through my blog, youtube channel, social media, tailored courses and downloadable material, I share information, resources and tips to help you manage your money better, grow your business, progress in your career, thrive in difficult times and create a life that is safe from failure, while being the best version of yourself. You will also find here links to my youtube videos where I share more nuggets to help you achieve and live your dream life. I am based in London, United Kingdom and always happy to connect with you via email (ronkeodewumi@gmail.com), social media or my contact page here.

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