The one financial skill nobody ever taught you.

Photo by Crosby Hinze on Unsplash

I bought my first car when I was 24; it wasn’t a new one, but a second-hand sedan. I found it at a used-car showroom owned by a friend’s uncle and purchased it at a good discount using money I had saved from my earnings.

I still remember the feeling I had after buying that car; it felt as though I had found all the happiness in the world at once. However, within a few months, the car started developing constant issues, and the repair costs began to mount. Frustrated by this, I eventually sold it at a loss.

Honestly, I didn’t really need that car at the time. I bought it simply because I liked it and wanted to project a certain image to my friends, neighbours, and relatives. But in this pursuit of appearances, I ended up losing a significant amount of money.

I simply failed to realise that I could have used that money elsewhere—saving it from being wasted—but the truth is, no one had ever taught me to think that way back then.

The reality is that, even today, no one teaches us to think like that.

In school, I was taught algebra and geometry, and I studied history—learning why World War I happened and what its consequences were. In science labs, I watched chemical reactions, and in biology, things went even further: I was taught how to dissect a frog—a skill I have never used since.

I was taught all sorts of things in school, yet no one told or taught me anything about money. Money is the most crucial part of our lives—something without which we cannot take a single step—yet no one ever taught us anything about it.

What does money mean in our lives?

How does it work?

How should it be used?

We ought to be taught these things in school so that when we grow up and start earning, we can manage our money wisely and secure our financial future.

In reality, whenever we decide to spend money, we are actually giving something else up. In economics, this is known as “opportunity cost.”

We can understand this with a simple example:

Suppose you have $100.

You have two options:

You can buy a new pair of shoes for $100.

You can invest that $100.

You decide to buy the shoes.

Now, the opportunity cost isn’t the $100—you’ve already spent that. The opportunity cost is the investment opportunity you missed out on by choosing to buy the shoes instead.

You can also look at it this way: suppose you have $5,000, but instead of investing it or starting a business, you just let it sit idle. The opportunity cost is the potential growth or income you could have earned had you put that money to work elsewhere.

This doesn’t mean you shouldn’t buy shoes. It simply means that whenever you make a financial decision, you should evaluate it thoroughly and consider whether you actually need the product or service you are spending money on.

You won’t find this simple concept in any school or college textbook because it is bad for business. You might find it hard to believe what I’m saying, but it is the truth.

Every economy runs on consumption. We buy things, businesses make money, and the cycle continues.

However, modern shopping is designed to make spending feel incredibly easy. For instance:

One-click purchasing.

“Buy now, pay later” schemes.

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These offers are so tempting that they instantly grab your attention, making you willing to buy the product at any cost. Every advertisement focuses on what you are gaining, rather than what you are giving up.

This is where the concept of ‘opportunity cost’ comes into play.

If you spend $1,000 on something today, that money cannot be used for your emergency fund, investments, debt repayment, or future goals.

Opportunity cost reminds you of the other things that could have been done with that money.

You don’t need to stop spending altogether. Just pause before making a purchase and ask yourself:

“What am I giving up by spending this money?”

“If I say ‘yes’ to this, what am I saying ‘no’ to? And is this deal worth it?”

When you start thinking this way, the full picture becomes clear, enabling you to make better decisions.

This single skill will set you apart from the millions who get caught in the web of misleading advertisements, handing their money over to companies and jeopardising their financial future. When you make even small decisions with such careful consideration, your life improves, and you can live it to the fullest.