'I made enough interest on my savings to fund a £1k holiday to Crete'

A woman cleverly funded her £1,000 summer holiday to the sunny island of Crete, not by scrimping and saving the usual way, but by playing it smart with interest from savvy savings. Vanessa Thompson, 33, dedicating a solid 10 hours each week to mastering the ins and outs of financial jargon and investing in a fixed-rate savings account.

Vanessa managed to cover the entire cost of her Grecian escape through the interest accrued alone. But this wasn't an overnight success story. Her journey to financial literacy began with some tough lessons in her younger years.

At just 17, she found herself bamboozled by the complex language in mobile phone contracts, leading to a costly mistake that haunted her credit score for years. Reflecting on the experience, the Birmingham local 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's struggle is echoed across the nation, with recent findings from Klarna indicating that a staggering number of Brits find getting to grips with financial terminology more challenging than picking up a new language. Vanessa 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."

The learning curve continued into her twenties when unclear terms surrounding a payment deadline for a household item resulted in an unexpected and hefty fee of over £100. To settle the charge, Vanessa had no choice but to clock in extra hours at work.

She said: "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."

In a bid to educate herself, she delved into books, social media, podcasts - anything that could boost her financial knowledge. Vanessa shared: "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 enhance their financial literacy, she advised them to start slow, and choose three things they want to learn first to avoid overwhelming themselves. She also suggested following finance-savvy individuals on social media but only after verifying their credentials.

Following the launch of Klarna's 'Financial Takeaway' series, featuring rapper-chef Big Zuu and finance expert Bola Sol, a study has revealed that 64% of Gen Z find it easier to pick up basic foreign words than understand financial terms such as APR, capital gains and compound interest. The research, part of Klarna's commitment to greater transparency in the financial industry, also found that 57% of millennials face similar challenges, according to a poll of 2,000 adults.

However, only 33% of Gen X share this difficulty, indicating a higher level of financial literacy among the older age group.

In response to the findings, Sol, who has spent nearly two decades making finances a second language, shared tips for understanding complex money jargon. She suggested using mnemonics and 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.