3 dads, 7 financial lessons
It has been said that children’s money behavior is largely influenced by the direct or indirect values their parents taught them.
Some children have been deliberately taught to manage finances. Some emulated how their parents managed money matters. (READ: Finance for mothers)
As we celebrate Father’s Day, here are the money lessons from 3 fathers born in different generations. Their advices border on a common theme that they all want their children to become money-savvy, as individuals and parents as well.
Baby boomer father
Marciano* was born 1954, a retired executive from one of the largest financial institutions abroad. “From peak to recession to recovery, I’ve been there and I saw the impact of these changes, not only to businesses but to individuals from all walks of life,” he said. His advices:
Live within your means. He said that while he is delighted to see young people gaining exposure and enthusiasm in being entrepreneurs and investors, he lamented the fact that many of these young people forget the first step in achieving financial security – savings.
Marciano said you cannot be financially successful without setting aside a portion of your income on a regular basis. “This will teach you the discipline to become skillful in managing your finances,” he said.
His advice is to save at least 20% of your income every payday and adjust your lifestyle that will fit the remaining 80%. “This strategy is time-tested and will teach you not to overspend,” he said.
“In the end, what matters is not how much you make but how much you keep that will determine the outcome of your financial future,” Marciano said.
Sacrifice today. “It’s foolish to think that the future will get better without making small sacrifices today,” he said. Thus, planning is difficult to many because of their tendency to live in the moment and their habit to delay things.
“If one of your dreams is to retire comfortably, then planning only when you’re in your 50’s might be too late and difficult to execute. Plan and save today for your goals and be safe tomorrow,” he said.
Generation X pop
John* is a father of two and just turned 40. He was born in the “MTV” generation and part of the youth culture at the turn of the millennium.
He also successfully transitioned from employee to business owner. His money advice stemmed from his experiences and his tough journey toward being his own boss. “I came from a family where money issues were never discussed at all,” he shared. “My parents are hardworking and were good providers but passive in providing money advice,” he added.
Now that his children are in their teens, he is guiding them well when it comes to money.
Take control. “It means that you should be your own CFO (Chief Finance Officer),” John said. You should not rely on your parents, spouse or even your financial adviser to put your financial house in order. The responsibility lies entirely on your shoulders.
Thus, the first step is to be aware of your finances. “It’s an injustice to yourself and family if your expenses outweigh your income,” he said. So he recommends that one should employ a budget plan to monitor and manage finances.
John also shared how he introduced money management to his children. “As soon as my children received their own allowances, I told them that they’ll have the liberty to spend the money on anything. The only catch is no additional allowance will be given to them until the following weekend. This taught them the value of spending their money wisely.”
Work hard. John, quoting the late American actor George Burns, said, “don’t stay in bed unless you can make money in bed.” “I’m not promoting that you devote your entire day to work but strive to make yourself productive each and every day. Time is a rare commodity so spend it wisely.”
‘Generation Y’ dad
Luis* is a rookie dad to his one-year-old daughter. He is part of the millennial babies who was born in the Internet age.
A third generation businessman who inherited the family business from his father, Luis said he is fortunate to be living in an age where information is unlimited, including money lessons, but admitted that his money values came from the wisdom of his father.
“My father is financially-savvy and the lessons he instilled on me allowed me to be successful on what I do,” he shared. His father taught him to:
Avoid debt. Luis said his father keep on telling him that if you cannot pay it on cash, do not buy it. “If you want something, stay frugal and save enough to buy what you want. Instant gratification equals instant headache,” he said.
Build good relationships. It does not matter how small or big their role is in your life, treat them the way you want to be treated. “Life offers no guarantees and you’ll never know when you need a helping hand to get you through tough times,” Luis said.
Invest in yourself. Continue learning. Do not let yourself become obsolete. In this Information Age, the more things you know, the more relevant you become in your industry, Luis stressed. “The only way to survive and get ahead in this competitive environment is to continually upgrade your competencies and skills,” he added.
Thus, to all the fathers, I salute and thank you. Continue in encouraging, inspiring, and guiding your children in reaching their dreams.
Happy Father’s Day! – Rappler.com
*Full name withheld
(Toddler counting coins with family image from Shutterstock)