'I paid for my holiday by only using the interest I made on my savings'
A woman has shared how she bankrolled her £1,000 summer getaway to Crete using just the interest made on savvy savings. To help with the cost of her holiday, Vanessa Thompson, 33, dedicated 10 hours-a-week to conquering money terms and making investments in a fixed-rate savings account.
All that time allowed her to pay for the trip solely by interest earning. However, Vanessa’s journey into learning monetary language started after a couple of false starts in her teens and twenties.
At around 17, she bought contract phones for her and a friend and the language used in the paperwork meant she didn’t fully understand what she was getting into. Vanessa, from Birmingham, said: “I remember thinking, what am I looking at? What does this mean? Why can’t you put it on one piece of paper?”
Vanessa isn’t alone in this, with new research from Klarna revealing that millions of Brits think mastering money terms is harder than learning to speak a language. She added: “I didn’t understand how much money I owed and it messed up my credit score for years.
"I couldn't open bank accounts or get new contracts. It took years to fix it. Later in my twenties, I should've paid off something I bought for my house, but the language around the deadline was muddy and I got hit with this massive charge, over £100. I had to pick up overtime at work to pay for it.
Vanessa Thompson revealed how she bankrolled an entire £1,000 summer getaway to Crete - just using the interest made on savvy savings.
“I was so frustrated with myself at first. It's like, 'come on, this is basic money stuff, right'? But then I realised no-one really teaches it to you, so you learn from your mistakes. I think 1000 per cent the banks and government should be doing more to improve financial education in schools.”
To help educate herself, she spent her time reading books, social media, podcasts - anything which helped increase her knowledge. Vanessa said: "Understanding financial jargon has totally changed the game for me.
“Take my recent holiday booking, for example. With my fixed saver account maturing, I knew I'd earn a certain amount of interest. So, I’m going to use that interest to cover the £1,000 cost of my trip to Crete this summer.
“It's something I wouldn't have even considered before diving into financial terms. Knowing where to put my money for the best return? That was a mystery to me before. Now, thanks to learning about different accounts and their benefits, I can make smarter choices with my finances."
For those looking to improve their financial language literacy, she advised them to take it slow, and pick three things they want to learn first to avoid overwhelming themselves. As well as following people on social media who talk about finance – but only after checking out their credentials.
It comes after Klarna launched its 'Financial Takeaway' series, with rapper-chef Big Zuu and finance expert Bola Sol, aiming to help improve the nation’s understanding of complex financial terms. The study, part of Klarna's commitment to improving greater transparency in the financial industry, found 64% of Gen Z think it’s easier to pick up basic foreign words than learn what the likes of APR, capital gains and compound interest mean.
Millennials face similar obstacles, with 57% considering financial terms to be more difficult to learn than a foreign tongue, according to the poll of 2,000 adults. But this drops to just 33% of Gen X, with the older age group feeling more confident about their financial literacy.
Following the research, Sol, who has dedicated tens of thousands of hours over nearly two decades to making finances a second language, revealed tips for understanding complex money jargon, from using mnemonics to discussing finances with friends.
She said: "Money terminology can be tricky to get your head round - everything from APR to compound interest, but mastering it can give you confidence and control. One quirky tip I love is using mnemonics and silly sentences to remember acronyms. Breaking learning down into manageable chunks is key.
"Start with just 15 minutes a day. Start with budgeting, saving, and understanding debt. Out of all financial terms 'Debt-to-income ratio' is the most important concept to grasp. It’s fundamental to understanding your borrowing capacity and overall financial health.
“Knowing this ratio helps you manage debt effectively and make informed decisions about taking on new debt. It’s vital we don’t operate out of desperation and make quick decisions when it comes to our money.”
Raji Behal, the payment network's head of Western and Southern Europe, UK and Ireland, which recently launched Wikipink to promote transparency in the UK credit industry, added: “We’re on a mission to help Brits better understand financial language so they can make smarter spending decisions.
“For too long, financial institutions have been using complicated terms to keep their customers in the dark, resulting in billions of pounds lost. We want to uncomplicate the complicated, as ultimately, it’s better for everyone.”
The Big Zuu x Klarna Financial Takeaway Series will air on YouTube from Thursday, June 27 at 10am.