The most important things I’ve learned about finance

Our guest author Carlos from Getreach shares his experiences with insurance and finance.

Article

3 minute read

2021-10-20

Finances are and will remain one of Germany's least popular topics in 2021. Why is that? In my opinion, it is due to a lack of education in this area. Neither at school nor at home are we taught financial skills.

Because of personal misfortune, I was "forced" to deal with finances at a relatively early age. Let me show you what this taught me.

Start as early as possible

Most people start dealing with financial issues as soon as they either have to file their first tax return or if they suddenly find themselves confronted with a large financial burden due to a lack of insurance cover. Fortunately, this was not the case for me. Due to a serious illness, my father had to give up his job at an early age, which put our family at a financial low. This caused stress and often an uncomfortable atmosphere at home. I was a teenager at that time and this motivated me to deal more intensively with finances in order to avoid such situations in the future.

At the age of 14, I started to learn about shares. I also started to invest early. Although I had to experience many moments where things didn’t go as planned, they were more than worth it. I also began to deal with tax returns at a very early age and helped my parents with them. Actually, I had little to do with insurance for a very long time. I dealt with the topic rather passively, as I always had negative associations with insurance. Why? Because insurance has always been presented negatively by the media. My parents also regularly described insurance as "a waste of money". This increased my passivity towards this subject. My attitude changed when I had to replace a fellow student's laptop after an accident. This was when I began to understand the benefit of private liability insurance. In fact, a year later, my insurance company covered a claim of €3,000.

If you are buying a new car, for example, you should look into car insurance very carefully. If you choose the wrong policy, you can quickly find yourself in an unfortunate financial situation.

Each of us can achieve potential savings

Each of us can realise our savings potential, even if we don't believe it yet. In my studies, I saved a lot of money with food sharing. When I travel, I use Airbnb or Couchsurfing to reduce my costs. When it comes to insurance, I do a contract check every year. I check whether I still need certain insurances and whether there are new, cheaper offers.

I have been using apps such as Finanzguru or Getsafe for insurance and private financial management for almost 3 years. These apps save me a lot of work, as apps like Finanzguru can identify all contracts based on my bank data and automatically send me new offers, for example.

My bonus tip: Only buy insurance policies that you really need. In the past, I often purchased flight insurance or equipment insurance that I never used. Many claims (for electronics) are covered by the manufacturer's warranty, for example. Unfortunately, this is not communicated at the time of purchase. Moreover, if you're still studying, you don't have to pay for your own liability insurance, because you're still insured with your parents. Sadly, I only realised this after I finished my studies.

YouTube and podcasts instead of boring books

Insurance is one area of my personal finances whose savings potential I have underestimated the most. I currently save up to €400 per year by changing or cancelling my contracts in time. From my point of view, the topic is relatively boring. If you want to find out more about insurance, you should take a look at YouTube. There are numerous channels that give you great insights into the world of insurance – such as the German channel "Versicherungen mit Kopf". Also, companies like Getsafe create their own content to explain complex topics to you as simply as possible.

You never have to know everything. Nevertheless, you should know which insurances are useful for you and which are not. Education makes you independent. Many "older" people are still very sensitive to insurance brokers and bank advisors, as there is often little education in this area and the fear of risks is very high. The more you know, the better.

What do we learn from this?

Learn about your finances. Taxes, insurance and pensions are not complex topics – you can understand everything with the right learning tools. People miss out on a lot of savings potential, especially when it comes to insurance, because they don't have a solid education in this area. Learn what you need to know and make decisions that will benefit you in the long run.

Click on the button if you would like to learn more about Carlos and Getreach.

Author: Getsafe