5 Financial Lessons I Learned from My Father

Date posted: June 14, 2016

Photo Credit: Claudia Heidelberger

For many millennials, parents are an essential source of financial information, and mine were no different. While my parents weren’t as hands-on with my financial education, as some parents, I did come away with a few valuable tidbits of information that have saved me from a world of financial hurt. In particular, I learned a lot from my father, who, as a small business owner, knew a thing or two about managing money.

In honour of the upcoming father’s day holiday, here are five financial lessons I learned from my dad.

Multiple streams of income provide financial security

My father was an entrepreneur, and his business had several income streams, so there was always money coming in from one venture or another.

I copied this strategy in high school when I worked a part-time job and also ran boarding facility for horses. I still keep up this strategy today. I work full time in marketing but also run a freelance business on the side. Sure, it’s a lot of work, but if I get laid off from my full-time job, I still have my side business earning enough money for me to survive on. It gives me great comfort.

It’s better to get punched in the face once than in the arm fifty times

In high school, I went with my father to buy a new car for our family. When we were negotiating the price with the dealer, he promptly turned down the financing option and used the analogy I mentioned above.

While the analogy is a bit colourful, what he meant was that you should never finance a purchase when you have the cash to pay for it.

It’s always better to pay for purchases up front with cash because you never know what will happen to your income in the future. This lesson even applies to 0% financing options. I would rather pay for the purchase up front than risk financing it, having a monthly payment and then losing my job and being on the hook for the balance.

Of course, paying for everything with cash isn’t always possible. I had to borrow $40,000 for my university education and $12,000 for my car. In those cases, I didn’t have the cash to pay for these purchases, so I financed them. I then set about paying them off as quickly as possible once I had the financial means to do so.

Post-secondary education is an investment

I distinctly remember having this conversation with my father when I was choosing my major for my undergraduate degree.

I went through many different potential majors, from journalism to biochemistry, but after researching the job potential of every degree program, I landed on a commerce degree with a major in marketing management. The average income for graduates from this program was higher than average, the unemployment rate was very low, and the co-op work term meant I could work for above minimum wage in the summers and gain valuable experience.

I’m so happy that I choose a degree in commerce because I know many university graduates that paid as much as I did for my degree, but unemployed or underemployed in their field.

Always insource

As a business owner, my father knew that it was often much less expensive to do things yourself than to pay another company.

I’ve taken this to heart, and I insource almost everything in my personal life. Whether it’s washing my car, walking my dog, cleaning my house, doing renovations or my taxes, I would rather save the money and do it myself than pay someone else.

It’s hard to save money when you don’t have any

I remember a particular situation in my life when my mother and father received a small inheritance from a relative.

They each got the same amount of money, and my mom spent her portion.

She spent it on things our family needed: a new set of pots and pans and a patio set. My father, on the other hand, saved his cash windfall and used it to pay the premiums on a small life insurance policy. In the end, the money my mother inherited was gone, and the money my father inherited was used to fund an inheritance for his children. It’s hard to save money if you don’t have any, but you have to start somewhere.

As an adult, I completely understand this. I remember after I had just finished paying off my debt, the idea of saving $10,000 for an emergency fund seemed unattainable.

I thought that there was no way in the whole world I could save that much money. But I set out and attacked that goal, and I achieved it. Two years later and I’ve honed my money saving skills to the point where I can save $10,000 in five months, partly due to the interest earned on the money I already have invested.

It’s hard to save money when you don’t have any. But everyone has to start somewhere, and the longest journey begins with a single step.

Happy Father’s Day!

Check out more related content:

Should You Build an Emergency Fund or Pay Off Debt?

Published on: Oct. 21, 2016

Continue reading

Money Minute - What if a Creditor Calls

Published on: Oct. 19, 2016

Watch video

How To Start Over After Losing Your Job

Published on: Oct. 14, 2016

Continue reading