Money at 30: Financial Lessons From My Father
Where do most people first learn about personal finance? Whether they realize it or not the answer is usually “from their parents.” Some of these money lessons are more explicit, such as figuring out how many weeks’ allowance you’ll need to save before you can buy the toy you want, while others are learned simply by watching the way your parents earn, spend, and utilize money. Even if these tips don’t always stick right away and you end up making a few financial mistakes (what are you looking at me for?), the advice you get from your elders is often something that stays with you as you try to navigate being an adult for yourself.
With Father’s Day coming up this Sunday, I figured (or rather my wife suggested) now was the perfect time to share a few financial tips my dad taught me over the years. This isn’t to say that my mother didn’t teach me anything about money as well, but with my dad being a CPA, it was usually him pointing out the errors of my ways and suggesting better alternatives. With that, here are three financial lessons I learned from my dad.
Pay yourself first
Of all the lessons my dad wanted to instill in me about money, this was always at the top of the list. He would often preach the gospel of setting 10% of your income aside (and another 10% for tithing at church, of course — although he did let me get away with using my net instead of gross in that department) before spending the rest on various needs and wants. As he explained, getting into this habit would allow me to build savings that could be used in case of emergency or to purchase something larger down the line. Not surprisingly, he was also very well aware of the ability to set up such a function automatically through my bank and recommend I take advantage.
Sadly, regardless of how many times I heard this particular tip uttered, it took a long time for me to actually heed it. Naturally this disregard led to the financially tumultuous times of my early 20s. But today my wife and I both take part in the practice of paying ourselves first in a number of ways, ranging from everyday savings to retirement.
Learn to invest
I’m not quite sure when it was that my father first started investing, but I know when he decided to up his game. Sometime in the mid to late 2000s my dad signed up for a series of seminars and online tools that taught him about technical analysis and stock markets in general. A few times I got to attend these workshops with him and learn all about puts, calls, candlesticks, and hammers. We even took a trip to Salt Lake City, Utah for a more hands-on event (sidenote: as part of that seminar they asked for certain stocks to look at. I recommended Marvel, which would be purchased by The Walt Disney Company a year or two later. If only I had been trading with real money…).
While I have yet to purchase my first share of stock outright, the basic lessons from those seminars have stuck with me. Furthermore I suppose I am technically an investor as my wife’s 401(k) along with our IRAs hold positions in various stocks. So although I will definitely need to brush up on all those different indicators should I choose to become a “real” trader, at least I now understand the tenets of investing and how to do so responsibly.
Do what makes you happy
One funny thing about money — you’re not always the happiest when you have more of it. My dad exemplified this on multiple occasions as he was never afraid to pivot when he felt it was right. This meant moving the family from New Jersey to Arizona when the frigid winters became a foe, starting his own auditing business for a time, and later leaving his high-paid position at a national company to get a master’s degree in education and become a math teacher. I didn’t realize it at the time, but my father is someone who follows his heart.
Perhaps more than in any other way, this is where my dad and I are quite similar. Sure he pushed for me to go back to college on more than a few occasions when I wasn’t doing much of note, but as soon as he saw I had found something I truly enjoyed and was gaining experiences I would cherish, he was nothing but supportive. So while he may not be able to relate to the exact path my life has taken, he can certainly understand the reasoning behind it.
I’m sure all fathers love when their children, no matter how many years later, confess that they were right all along. In my case, if there’s an overarching theme to this column, it’s that my dad was right when he taught me about money. Had I listened to him sooner I may have been a bit better off, but then again I might not have had anything to talk about here! So thanks, dad, and happy father’s day.
Note: the drawing featured in this article actually comes from a chapter in my book about my father and me visiting Disneyland at the holidays for the first time. I realize it may be weird to see a Christmas tree in June, but there’s a reason for it — and isn’t knowledge a gift after all? 🙂