He was no Jim Anderson, but without a doubt, my father knows best… at least when it comes to personal finance.
He has so many three-letter acronyms after his name on his business cards that you’d think he was teaching preschoolers about the alphabet. CPA, CFP, CFO… the list goes on. He’s a financial expert – maybe even a financial genius – and he loves dispensing money advice whenever possible.
Case in point? Two weeks ago, my dad had a quadruple bypass. Technically, he was only supposed to have a triple, but his cardiac surgeon found a fourth blockage just as they were about to close him up and figured, why not? Dr. M told my parents and I in post-op that accountants are more likely than any other type of professional to suffer from heart disease, especially during tax season. (I tried to find medical studies corroborating this, but could only find clinical data suggesting their blood pressure and cholesterol – and not their risk for a catastrophic event like a heart attack – was higher during this time. Not saying I doubt Dr. M’s medical prowess, but I’m a journalist and like to back things up with evidence… failing that, however, we’ll just have to take his word for it.)
Anyway, as my father was recovering from his open heart surgery, he was having a tough time coping with the physical pain and emotional exhaustion – that is, until one of the cardiologists realized my dad was a tax professional.
“I know you’re trying to recover,” he began one morning shortly after rounds, “but I heard you’re a CPA…”
That was all it took. My dad was happy to talk about money instead of listening to the beeping of the heart monitor; he was thrilled to answer the doctor’s – and then the nurse’s, and then the respiratory therapist’s – questions rather than wonder how long he’d be out of work.
The thing is, my dad’s always teaching people money lessons – whether he’s officially on the job or officially on bed rest. From my earliest days, he’s been giving me real world lessons on personal finance and managing my money.
Lesson #1: Saving Starts Early
I was eight years old and had just celebrated my First Holy Communion at our local Catholic church. After the Sunday service, my entire family came over to our house for a big party. I, dressed in my white gown that made me look like a tiny bride, was less than thrilled when just about every card I opened contained not a toy but a check. What good would this do me, I asked myself, glaring at what I considered to be my decidedly ungenerous relatives.
The next day, my dad took me down to the bank, where we used that money – $300, to be exact – to open my very first savings account.
More than 20 years later, I still have that account. Over the years, we opened a checking account, allowing the two to work in tandem to help manage all my teenage financial needs. When my husband and I got married, I refused to add his name to the account: it had been mine since I was a little girl, and it would remain mine – and mine alone – until I was old and grey.
Lesson #2: Managing Your Credit
“Whatever you do,” my father warned me in his sternest voice, “do NOT open a credit card account – even if they offer you a free hat!” And, with those sobering words fresh in my head, my mom and dad climbed into the car and headed home. They’d just dropped me off for my freshman year of college, and – while my mom warned me about binge drinking and being roofied – my dad’s only advice was not to be duped by credit card companies selling their wares on campus.
It’s advice I followed not only through college, but into my adult life as well. To this day, I’m very cautious of my credit. Ultimately – and with my father’s advice – I did select a few credit cards to put in my wallet, but he taught me to use them sparingly. He showed me – not just with his words, but by his own example – that credit cards are part of your overall budget, not an excuse to spend money you don’t have. Because of his personal finance expertise, I graduated college without a penny of credit card debt (although I did have student loans…)
Lesson #3: Finance Your Education
Both of my parents are college educated. In fact, they met at a large state school in their home state. But when it came time for me to make my college choice, my parents – led by my father – urged me to think bigger.
When I selected Duke University (no basketball jokes, please), my father didn’t bat an eye. Instead, he helped me fill out the requisite FAFSA forms and, later, negotiate with Duke’s financial aid office to increase the number (and value) of grants I was receiving. When the grants – and my parents own contributions – weren’t enough to pay the whole bill, my dad secured low-interest student loans; he later helped me consolidate those loans under an even lower interest rate shortly after graduation.
In all, I graduated from Duke with $17,000 in student loan debt. Considering the school cost $46,000 a year – for a grand total of $184,000 over my four years – $17k wasn’t all that bad. Then, with his help, we managed to pay it off in under five years. (I later went on to earn my master’s degree as well; I am still working to pay off that loan.)
Could I have followed my parents to state school and graduated with less debt? Probably, although I do have friends who went to a public school and have just as much – if not more – debt. But my father didn’t want to place barriers on my enthusiasm for learning because of the price tag. He knew that it was possible to finance a high-priced education without breaking the bank; he not only avoided crushing my collegiate dreams, but also crushing my financial future.
Father Knows Best
Today, my dad is still the first person I turn to when I want personal finance advice. He’s helped me navigate rolling over my 401(k) to a Roth. He helped me figure out a tricky tax return the year I switched from a full-time employee to a freelancer. He was even at my side while my husband and I negotiated our first mortgage. I know that my father knows best – then, now, and always (well, at least when it comes to money lessons).
Readers, what are the most valuable personal finance lessons your parents taught you?