Three Lessons My Father Taught Me About Money

Believe it or not, many of our financial habits are developed before our teens and so our families have a huge impact on our relationship with money. Not only was my father savvy with money, but it was also important for him to teach us key financial lessons.

 

My father was aware that I wasn’t going to learn much about managing money in school. In fact, my allowance often required writing book summaries of titles he chose, and many of them were personal finance books  (I also had a sneaking suspicion he may have been paying me for cliff notes for titles he didn’t have time to read). Many of those books and his personal example set my financial foundation.

Working in the financial services industry for the past 13 years has given me even more perspective on my father’s money lessons and why they are still relevant today, especially for young professionals.

Lesson #1: Money is a Tool. It Can Build or Destroy

My parents emigrated to the U.S. from the Caribbean before I was born. Coming from a third-world country gives one perspective on how people can live satisfying and fulfilling lives with or without material wealth. It was important that we understood that money is neither good nor evil, but a tool. A hammer, for example, can be used to build a home or cause serious harm. Similarly, money can both build opportunities or destroy relationships. Money is not to be worshiped and it does not make one person better than another.

The purpose of accumulating wealth is to gain greater control over your time and talent and to help others do the same. Click To Tweet

Unfortunately, our society idolizes celebrity culture where many use their wealth to validate their own self-worth. We can drape our bodies and fill our homes with expensive brands and trinkets, but those things fade quickly.

Think of a time when you bought something that made you feel important (a car, clothes, a tech gadget, a bag, shoes). If it was more than a year or two ago, you likely feel very different about it today and may not even still own it. We are encouraged to spend most of our money on things that give us short-term satisfaction. There are plenty of examples of athletes, artists, and lottery winners who painfully learned this lesson, where money was actually a destructive force in their lives and well-being because of the abuse and misuse of their finances.

Money is simply a tool; use it to build or enhance things of REAL value like time, experiences, relationships and community. Click To Tweet

Lesson #2: Your Relationship with Money Should Mature Just Like You Do

Toddlers learn the idea of possession very quickly. The words “no” and “mine” are typical among their first words. Just try taking a favorite toy away from a 2-year old child! Children also lack the perspective of short-term and long-term consequences of their actions. So if they like cake and ice cream, they will continue to eat it until they can’t eat anymore and get sick.

In college, I noticed my classmates using credit cards for everyday items like pizza, gas, and clothes. Of course, everyone’s financial situation is different, but the idea of using a credit card (a short-term loan on plastic) to buy a $10 pizza honestly never even crossed my mind until I saw my classmates do it. My first credit card was in college and was a shared account with my father and explicitly used only for books and emergencies. So the idea of explaining to my father who Papa John is and why that pizza was an emergency was not a circumstance I was willing to deal with.

Over time, we mature and develop the perspective to understand the importance of giving and sharing as well as the short and long-term consequences of our actions. Unfortunately, our financial maturity doesn’t always follow our social maturity.

Here are a few questions to evaluate your financial maturity:

  • Do you know how much you spend and save each month?
  • Do you live on less than you earn each month?
  • Do you regularly donate money to charity or a specific cause?
  • Do you have written financial goals? Do you track your progress?
  • Do you have an emergency fund?
  • Do you invest for the future?

If you answered no to any of those questions, that’s okay! Everyone is on a journey; just make sure you are moving forward in a direction that tracks with your goals and values. Ideally, your relationship with money will grow from satisfying immediate desires to developing short and long-term savings to giving regularly to building wealth and a legacy.

Lesson #3: Managing Money Properly Requires Muscle: Use it or Lose It 

Managing your finances is not a one-time deal. If you’ve never done a monthly budget before, the first three months, your budget will be lousy and you’ll make a ton of mistakes. Much like working out, the first time you start making better decisions with your finances, you may experience some soreness. It may feel like you are punishing yourself when you halt some of your routine purchases, but when you start to see the benefits in terms of savings, it makes it worthwhile.

Financial management is an ongoing practice.

If you don’t make decisions about your money, your money will make decisions for you. Click To Tweet

You build the muscle of financial management through continuous learning and practice. To this day, my father still reads books about personal finance and investing. He continually learns and grows in order to make better decisions with his financial resources. If you stop learning and stop growing, you will regress.

My father used to say,

“Nothing in nature stays constant; we are either green and growing or we are ripe and rotting.” Click To Tweet

I was very fortunate my father taught me the lessons he did, but his personal example was actually more impactful than his words. For example, he actually saved mailing tubes that one would use for rolled up posters or paintings and would fill them with loose change. It was his version of a piggy bank. He had me pick it up to show how heavy it was and would later show me the bank deposit receipt. Some of those tubes paid for family vacations and to this day is a reminder to me of the power of saving in small amounts. Hopefully, his lessons and example assist you on your own financial journey.

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