JANUARY 6, is the Epiphany, or the Day of the Three Kings in some countries. It marks the last of the 12 Days of Christmas and is the day when many orthodox Christian families exchange gifts.

JANUARY 6, is the Epiphany, or the Day of the Three Kings in some countries. It marks the last of the 12 Days of Christmas and is the day when many orthodox Christian families exchange gifts.

Money Express with Jill Kerby in association with Aviva

So it is the ideal day in which to share with readers what I think is the best gift that you can give yourself and your family this difficult year: the gift of a financial education.

In my 20 years writing about money and personal finance – 10 years in this syndicated column alone – the biggest handicap that Irish people have suffered in terms of their personal financial situations, has been their poor understanding about how money works.

That lack of knowledge and understanding has also been one of the contributing factors to what brought this country down, and when its mixed with notions of power and greed, it is what now threatens our fellow indebted club members of the Eurozone.

Regular readers should know pretty much where I stand: to have financial peace of mind, you need to live within your means, you need to be debt-free and have, at the very least, a steady source of income.

Wealth and financial independence is another matter. This requires a growing income, profit that is saved or invested, which in turn provides income and/or profits that are then re-invested. This is a life-long process if it is to be sustainable.

The wealthiest people usually take a different, higher risk route and use their income, saving and borrowings to building a company, the profits of which will make them – eventually – financially independent. This isn't a quick fix, but if successful, the company owner can become independently wealthy sooner than the person who doggedly earns a salary, saves and invests their money.

The gift of a financial education for 2011 isn't about getting wealthy. It's about not becoming poor. It's about being able to preserve what wealth you have, avoid the dangers of the money marketplace, about not getting caught out by the threat of sovereign default, the possible end of the euro, food and fuel price inflation and the continuing weakness of the property market.

Regular readers know that I swear by having an individual or family budget. This is an emergency savings fund to cover everything from a broken boiler, unexpected illness or even temporary redundancy. On top of that, you need to save another percentage of your income – from the moment you start working – to help pay some day for large items like a car, a first home, family weddings, retirement.

Avoiding expensive debt is another key lesson in your financial education. Credit cards, for example, are hugely useful financial instruments that can be manipulated to your advantage if you gain huge bonus points, but they can also be the ruin of you if you don't have the discipline to pay off your balance every month, thus avoiding double digit, compounding interest.

The most important part of your financial education will be to understand the fundamentals of investing. The core message hasn't changed: investing your money in successful, profitable companies, property, commodities, even in the debt of a company or country (bonds and gilts) will, especially with the magic of compounding the annual gains, exceed the return you will get from a savings fund.

But the investment environment is volatile, uncertain and even dangerous to the unwary.

The rules have been twisted and tampered with by central banks and the politicians and powerful investors with whom they collude. That the insiders – the corporations and individuals who control the markets - make the most money is nothing new: Mark Twain, on a tour of Wall Street and lower Manhattan at the turn of the century wasn't particularly impressed when all the great banker's yachts were pointed out to him on the Hudson: "Where are all the customer's yachts?" he asked.

What is different now, is that for the past 40 years there has been no 'sound money' behind the great credit binge and ordinary people have been left to somehow pay off the catastrophic debt that was created.

This coming year, you need to concentrate not on building a yacht but an ark. Many younger people who have lost their jobs may have to retrain or immigrate – their ark - if they can't find work here. Everyone who remains, as taxation increases and state services shrink, needs to find answers to these pressing questions:

- What bank should I save with? How safe is the bank?

- How can I refinance existing debt or achieve debt forgiveness?

- How can I avoid higher taxation?

- What assets should I own to protect against currency debasement or devaluation?

- How can I lower my overheads especially insurance and utilities, transport and education costs?

- What good value investments should I buy, for income or growth purposes?

- How can I fund retirement, now that tax incentives are disappearing?

- Is there a cheaper, more tax-friendly place to which I can retire?

Starting next week, I'm going to identify some of the practical tools you will need to avoid making personal financial mistakes and then how to make your money work for you. We'll then move onto the savings/currency options you need to consider, and then the investment trends you should be considering.

Meanwhile, my new TAB Guide to Money Pensions Tax & the Recession 2011 is available and you can order online from or

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