Money tips from Game of Thrones

Between all the sex, violence, dragons and zombies, Game of Thrones (and the books that inspired it) can provide several valuable lessons about managing your personal finances, as well as helpful examples and cautionary tales (spoilers for previous seasons to follow): 

Rub two coins together to breed a third

“They’re only numbers – numbers on paper. Once you understand them, it’s easy to make them behave.” – Littlefinger

Lord Petyr “Littlefinger” Baelish starts the series as King Robert’s Master of Coin (the royal treasurer). While this position earns him little respect in a kingdom where bloodlines and battle glories are valued over financial savvy, it allows him to engage in plenty of self-serving schemes and plots, right under the royal nose.

Rather than simply counting the King’s coins to spend on wine, women and song, Littlefinger takes an active role in managing the kingdom’s wealth: investing it here, withdrawing it there, and finding ways to keep the kingdom afloat.

Instead of locking your own money up in a vault (or bank account), consider looking for ways to increase your wealth. Depositing some of your money into a savings account or term deposit can allow you to earn interest, and there are many other investment options available to think about.

Watch your spending and borrowing

Bronn: I’ve never borrowed money before. I’m not clear on the rules.

Tyrion: Well, the basic principle is, I lend you money, and after an agreed upon period of time, you return it, with interest.

Bronn: And what if I don’t?

Tyrion: Well, you have to.

Bronn: Well, what if I don’t?

Tyrion: This is why I don’t lend you money.

When Tyrion Lannister later takes over Littlefinger’s position as Master of Coin, he discovers the truth – rather than getting the crown’s money from investments, or even stealing it, Littlefinger’s been borrowing it. And between financing the late King Robert’s extravagant lifestyle, waging the War of Five Kings, and paying for King Joffrey’s upcoming wedding, the Iron Throne is now millions in debt.

Every loan is a risk, so try to borrow money carefully, and consider what benefits it may bring you. For example, borrowing money to buy a home or a car can cost a lot in interest and fees, but you’ll own an asset that’s valuable (e.g. a home or investment property) and/or useful (e.g. your own set of wheels). But borrowing to pay for one-off luxuries or unplanned expenses (e.g. weddings with 77-course feasts) could risk leaving you trapped in debt, without much to show for it, as your interest charges build up.

Always pay your debts

“A common saying, but not their official motto.” – Maester Luwin

The unofficial Lannister words can be a promise, a sinister threat, or both. Tyrion Lannister goes out of his way to repay kindnesses done to him, such as tossing his coin purse to Mord the jailer at the Eyrie, or offering to double any competing offer for Bronn’s sellsword services. Cersei Lannister never forgets a slight against her, and repays them with everything from barbed putdowns to bloody (and explosive) murder.  

If you want to save money, it’s often wise to try and pay your own debts as quickly as you can afford. The longer you owe a debt, the more you’ll be charged in interest, and the more your loan will ultimately cost you. Making extra repayments can help reduce your loan principal, shrinking your interest charges and bringing you closer to making an early exit from your loan.

The Iron Bank will have its due

“Across the Narrow Sea, your books are filled with words like “usurper” and “madman” and “blood right.” Here, our books are filled with numbers. We prefer the stories they tell. More plain. Less… open to interpretation.” – Tycho Nestoris of the Iron Bank of Braavos

When grumpy grammar nerd Stannis Baratheon started planning his second attempt to seize the Iron Throne, he applied for a loan from the Iron Bank of Braavos to pay for his war. However, the bankers turned him down, pointing out the odds of victory weren’t in his favour. It took an earnest speech from Ser Davos “Onion Knight” Seaworth vouching for Stannis’ personal integrity and pointing out the unreliability of the Lannisters, who presently held the throne and owed substantial debts to the Iron Bank, to bring them around.

A similar process takes place whenever you apply for a loan at a modern bank, with a few key differences. Rather than counting your troops and provisions, lenders will look at your current income, assets and other debts to work out if you can comfortably afford to repay this new loan. They’ll also conduct a credit check, looking at your history of borrowing and repaying money to determine if you’re financially responsible. If the bank thinks you can’t afford a loan, or if the risk that you’ll default on your repayments is too high, they may reject your application.

But just like Stannis, you may still be able to get a loan with just a little help – not from a straight-talking ex-smuggler, but from a guarantor. This is typically a family member who agrees to take on your debt if you’re unable to afford it – for example, if a first home buyer can’t afford a large deposit, their parents can use their equity in the family home to guarantee the new loan. This is a big responsibility, so make sure any potential guarantor is aware of the risks involved.

Winter is coming

Tyrion: I’m a bit short on castles at the moment, but I can offer you gold and gratitude.

Bronn: I have gold. What can I buy with gratitude?

After King Tommen’s coronation, house patriarch Tywin Lannister drops a bombshell to his daughter Cersei – the family’s famous gold mines (their only source of income) have been dry for years. Effectively bankrupt and faced with an uncertain future, all of Tywin’s deft political manoeuvring in recent years has been to put his family in a better position for the lean years to come.

It’s worth remembering that financial hardship can strike at any time. You could lose your job, or have to pay for major car repairs or medical bills. It’s sensible to have a backup plan in place in case calamity strikes, such as keeping some money in a savings account for a rainy day.

Another option is to choose loans that offer flexible features, such as a redraw facility or offset account. If you’ve been making extra repayments towards a loan to help lower your interest charges, you may be able to “redraw” this extra money if you need it back in your pocket in a pinch. Money in an offset account can also help reduce your interest charges, and can be quickly transferred to wherever it’s needed most.

Always read the terms and conditions

“The Dothraki don’t believe in money.” – Ser Jorah Mormont

When Viserys Targaryen arranged the marriage of his sister Daenerys to Khal Drogo, he believed he was making a simple exchange – Drogo gets a queen (rather, a Khaleesi), and Viserys gets an army of Dothraki warriors to reconquer the Seven Kingdoms. Unfortunately, he didn’t know that Dothraki economics is less about transactions and obligations than it is about gifts and plunder. And when Drogo eventually offered him the golden crown he wanted, it was not at all what he expected…

While modern financial matters don’t involve gruesome murder, it’s still important to understand exactly what any transaction involves before making an application or signing an agreement. The cheapest deal isn’t always the best deal, and knowing the potential risks and rewards can help give you a better idea of whether a loan or other financial product is ultimately suited to your situation.   

Rise again, harder and stronger

“Some at the Iron Bank will be disappointed. They’ve grown rather fond of your interest payments.” – Tycho Nestoris

The freshly-crowned Queen Cersei Lannister came up with a novel solution for her ongoing debt problems – invading the rich Tyrell lands and sacking their seat of Highgarden. When offering to repay the Iron Bank with the looted gold, Queen Cersei discussed taking out a new loan to fund her war against Daenerys Targaryen, which the banker was happy to offer.

While theft and murder is not an acceptable solution to debt problems, refinancing a loan may be worth considering if your financial position improves. For example, many first home buyers can only afford a small home loan deposit, meaning their mortgages are rarely the most affordable options available. But after a few years of paying their home loan and building up equity, they may become able to refinance to a loan that offers lower interest rates, cheaper fees, or features and benefits that are better suited to their needs.

Valar morghulis.

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