21 Personal Finance Lessons From Harry Potter

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I recently finished rereading all of the Harry Potter books in anticipation of the final movie’s release. The first time reading the books, I was focused on the plot. But in rereading, I was struck by the reoccurring themes of money and personal finance throughout the books. (See also: 9 Ways Star Wars Can Inspire You to Save Money)

Here are some of my favorite financial lessons from Harry Potter, coupled with either a brief description of the events or a quote from the book.

1. Money Doesn’t Buy Happiness...

Some of the most miserable people in the book — the Malfoys — are the richest. And some of the poorest — the Weasleys — are the happiest.

2. ...But It Sure Can Help

Harry is able to escape some of the miseries of his summers at the Dursleys with money from his inheritance, and Ron, who frequently laments being poor and wearing hand-me-downs, is happier when he has new items.

3. Earn Extra Money on the Side

Fred and George work to make some extra money before going into business for themselves. Ron says in book four, “I don’t blame Fred and George from trying to make some extra money. Wish I could.” What Ron doesn't realize is that anyone can earn more money with a side business.

4. If Something Seems Too Good to be True, It Probably Is

At the Quidditch Cup, gold rained down on everyone in the stadium. The crowd got extremely excited and started gathering up the coins. Unfortunately, it was Leprechaun gold, which disappeared shortly after. Next time money seems to be falling into your lap, remember the Leprechaun gold.

5. Time Is Money

After apparating down the stairs (to save 30 seconds from walking down them), Fred says to Ron, “Time is Galleons, little brother.” While apparating to save a few seconds is a little extreme, this shows the need to be conscious of our time. 

6. Don't Steal; You'll Get Caught

Mundungus, one of the original members of the Order of the Phoenix, has a bit of a theft problem. In book five he brings stolen cauldrons to the safe house and gets caught. Mrs. Weasley shouts at the top of her lungs, “We are not running a hideout for stolen goods…As if we haven’t got enough to worry about without you dragging stolen cauldrons into the house.”

7. Being Obsessed With Money Can Be Bad and Lead to Trouble

When Fred and George are first trying to get their magic shop started as a mail-order business, Ron comments, “They’re obsessed with making money lately…” Ron then begins to suspect them of blackmail and breaking school rules in order to get money because he doesn't realize exactly what they are doing. Similarly, when people in our lives become consumed by dollars and cents, we often suspect the worst.

8. Money Makes People Take Unnecessary Risks

In book four, the award for winning the Triwizard Tournament is 1,000 Galleons. Students start taking unnecessary risks to enter their names into the fire. For example, Fred and George try to cross the Age Line, which prevents students under the age of 17 from entering their names in the Goblet of Fire, and they are thrown backwards and immediately start growing long white beards (which Madame Pomfrey has to fix).

9. Good People Don’t Want Money That Doesn't Belong to Them

After Cedric dies in the Triwizard Tournament and Harry wins the 1,000 Galleons, he tries to give it the sock of gold to Cedric’s family. He says, “You take this...It should’ve been Cedric’s,” but Mrs. Diggory backs away and refuses. Mrs. Diggory doesn't feel that the money belongs to her, and she likely doesn't want the reminder of her dead son.

10. Don’t Gamble; You’ll Lose Even When You Win

Fred and George bet with Ludo Bagman, a wizard with the Department of Magical Games and Sports, that Ireland would win the Quidditch World Cup but Krum would get the snitch. They won, but Bagman never paid them back. He said they were too young to gamble, and Fred and George lost everything.

11. Don’t Borrow Money for Gambling, Especially From Goblins

Ludo Bagman borrowed gold from the goblins in order to gamble. He had to run from the goblins because he wasn’t able to pay them back. While we don't have goblins in real life, borrowing money from anyone to gamble is a bad idea. Perhaps goblins can be equated to a credit card company — if you borrow money and don't repay it, they will always find you, and the consequences won't be pretty.

12. People Can Be Resentful If You Try to Secretly Help Them

Harry buys Hermione and Ron omnioculars at the Quidditch Cup. Ron repays Harry with Leprechaun gold, which later disappears, but Ron doesn't realize it. Rather than tell Ron that he didn't actually pay him back, Harry lets it slide. But later, Ron finds out and is resentful of Harry's generosity: “Why didn’t you tell me about the gold?...Why didn’t you tell me it disappeared…I thought I was paying you back.” Like Ron, many people can be resentful of generosity when it reminds them of how little they have. The best approach when you are generous with your time or money is to be upfront about what you're doing without showing it off.

13. Depending on the Time and Situation, Money Matters to Some People More Than Others

Harry and Ron have a conversation about Ron’s repayment of Leprechaun gold and Harry says. “I never noticed [the gold] had gone. I was more worried about my wand, wasn’t I.” Ron replies “Must be nice…to have so much money you don’t notice if a pocketful of Galleons goes missing.” 

In your own life, recognize to what extent you value and need money right now. While direct comparisons to other people's finances are rarely helpful, keeping a larger perspective will help you understand where you and others are coming from for anything finance related. (Considering how much money matters to others can come in handy with something as simple as splitting a dinner bill with friends — money likely matters more to your friend who just lost his job, and being aware of this can prevent misunderstandings and hurt feelings.)

14. Hard Work Leads to Success, and Success Gets Rewarded

After working hard and showing leadership during his first four years at Hogwarts, Ron was selected to be a Prefect. In recognition of this, Fred and George bought Ron new robes, and Mrs. Weasley bought him a new broomstick.

15. Giving Generously May Help You Later

“Malfoy’s been giving generously to all sorts of things for years…Gets him in with the right people...then he can ask favors…delay laws he doesn’t want passed...Oh, he’s very well connected, Lucius Malfoy….”

Lucius Malfoy gives to the Ministry to influence things in his favor. While this sort of lobbying is generally frowned upon, the truth is that it works. So give to causes and people you support, as it may help you in the future.

16. A Little Luck Never Hurts

Before entering his hearing in book five, Harry promised that if it went well, he would put 10 Galleons in a nearby fountain where spare coins are collected to donate to a hospital. After the hearing went well, Harry turned “his money bag upside down and emptied not just ten Galleons, but the whole contents into the pool at the statue’s feet.” Some may see this as showing how money can be needlessly wasted, but to me it shows that even amazing people are superstitious and need some luck sometimes. In the toughest situations, we can all use all the luck we can get.

17. Free Stuff Is the Best Promotion

In their ultimate last act before leaving the school, George and Fred turn Headmistress’ Umbridge’s Hogwarts into a disaster by setting off fireworks that multiply. Everyone comments on what amazing fireworks they are. The twins use up their entire stash in order to pull the prank, which drums up business. “It was worth it,” said Fred, who was taking orders from clamoring Gryffindors.

18. Keep Your Money in a Safe Place

Gringott’s Wizarding Bank, where all the Harry Potter characters bank, is the safest place on the planet since it’s protected by goblins. In real life, keep your money in an FDIC insured bank account.

19. Do What You Love and the Money Will Follow

Fred and George love playing pranks. By the end of the Harry Potter series, the twins are no longer just selling their products around school, but they've launched their own extremely successful business, Weasleys' Wizard Wheezes, based on that love.

20. Get a Good Education...

The Harry Potter series follows students throughout their years at Hogwarts and continually emphasizes the benefits of getting a good education.

21. ...But Don’t Be Afraid to Leave School If It’s Not for You

In the final books of the series, several characters leave the school because it wasn’t right for them at that point in their journeys. Fred and George quit school as do Harry, Hermione, and Ron. While some parents and professors are disappointed, in the end we discover that this really was the best decision for everyone.

Did you notice any other finance related themes in the Harry Potter books?