Seven financial lessons you probably learned the hard way


Your favorite math teacher taught you fractions. Your grandmother taught you how to bake. Your father taught you how to change your oil and your mother taught you how to ice skate.

So who taught you about money? You may have received a few friendly tips here and there, but chances are good that a lot of your most important financial lessons came directly from life itself. And they were probably a bit harsh.

Here are just a few of the important money lessons you probably learned the hard way.

There’s usually a catch

Every day you’re bombarded with “great” deals. Free! Nearly free! Two for one! Ten for one! Zero percent financing!

You may be naturally suspicious, but it’s not until you make your first really terrible, money-wasting decision that you truly and forever accept that nothing is ever quite as good as it’s made out to be. (Especially timeshares.)

Credit is hard to perfect and easy to ruin

It’s easy to take credit for granted when you don’t really need it, which is why so many young adults do such lasting damage to their credit history. It’s not until you actually need good credit and see the actual cost associated with having subpar credit that you appreciate how much work goes into crafting an excellent score.

It’s dangerous to spend money you don’t have

You need to use credit to build credit, but that doesn’t mean you can afford to let your spending outpace your earning, with borrowed money filling in the gap. For a lot of us, though, it’s hard to respect the dangers of abusing credit until we see exactly what our overspending has cost us.

Always get it in writing

Trust is a wonderful thing to have. An even better thing to have is trust plus a written contract. Unfortunately, we usually have to have at least one messy falling out over a broken verbal agreement before we accept that everything is better in writing.

Don’t lend money to friends or family

Of course you want to help out any way you can. And I’m not suggesting that you can’t give money to your loved ones. But loans between friends and family members rarely work out and often end up causing much more damage than good.

Prevention is a wise investment

When the car starts making a funny whistling sound, but still drives just fine, you might think, “This is fine. It’ll be fine.” And when you notice a little crack in the foundation of your house, you might think, “That’s a very small crack. It’ll be fine.”

In truth, things are always fine right up until the moment they aren’t fine anymore. Unfortunately, that’s not a lesson we’re fully receptive to until the car breaks down in the middle of the highway or we’re forced to spend $5,000 to fix our foundation. Long story short – little problems are easier (and cheaper) to fix than big problems.

When disaster strikes, you’ll always wish you’d saved more

It’s hard to appreciate the value of an emergency savings account until you’re faced with a significant financial setback. It’s not until disaster strikes that we realize just how much we help ourselves by making a dedicated effort to put money away for a rainy day.

But those are only a few examples. What are some money lessons you had to figure out the hard way? Leave a comment below!

Jesse Campbell is the Content Manager at MMI, focused on creating and delivering valuable educational materials that help families through everyday and extraordinary financial challenges.

  • The Consumer Federation of America (CFA) is an association of nonprofit consumer organizations that was established in 1968 to advance the consumer interest through research, advocacy, and education. Today, nearly 300 of these groups participate in the federation and govern it through their representatives on the organization's Board of Directors.
  • The National Council of Higher Education Resources (NCHER) is the nation’s oldest and largest higher education finance trade association. NCHER’s membership includes state, nonprofit, and for-profit higher education service organizations, including lenders, servicers, guaranty agencies, collection agencies, financial literacy providers, and schools, interested and involved in increasing college access and success. It assists its members in shaping policies governing federal and private student loan and state grant programs on behalf of students, parents, borrowers, and families.

  • Since 2007, the Homeownership Preservation Foundation (HPF) has served as a trusted, neutral source of information for more than eight million homeowners. They are partnered with, and endorsed by, numerous major government agencies, including the U.S. Department of Housing and Urban Development and the Department of the Treasury.

  • The mission of the U.S. Department of Housing and Urban Development (HUD) is to create strong, sustainable, inclusive communities and quality affordable homes for all. HUD works to strengthen the housing market in order to bolster the economy and protect consumers; meet the need for quality affordable rental homes; utilize housing as a platform for improving quality of life; and build inclusive and sustainable communities free from discrimination.

  • The Council on Accreditation (COA) is an international, independent, nonprofit, human service accrediting organization. Their mission is to partner with human service organizations worldwide to improve service delivery outcomes by developing, applying, and promoting accreditation standards.

  • The National Foundation for Credit Counseling® (NFCC®), founded in 1951, is the nation’s largest and longest-serving nonprofit financial counseling organization. The NFCC’s mission is to promote the national agenda for financially responsible behavior, and build capacity for its members to deliver the highest-quality financial education and counseling services.