A Retirement Gift from Dad: Fatherly Financial Advice
|June 21, 2015||Posted by Marcia Mantell under Boomers in Action|
Sitting in a conference, one of the speaker’s questions caused me to stop and think about money advice from my parents. The question was, “Do you remember any of the financial advice from your parents when you were a young child?”
While I had not thought of this for years, I did remember a money situation from when I was a little girl of 7 or 8: I loved dolls back then and played with them as if they were members of the family. While in a store one day with my parents, I found the perfect set of plastic doll dishes and baby bottles with the fake “milk” that disappeared when you turned them upside down to “feed” the baby. I simply had to have this set for my dolls, Annie and Katy.
I ran over to my dad and explained that I had found this most wonderful set of doll dishes and would like to get it. I was unhappy when he said “No” to my request and quite disappointed that I couldn’t get these new dishes.
Forty-some years later, I still remember this trip to the store. And thanks to that question at the conference, I realize that this was indeed very sound and important financial advice from my dad. In fact, it was probably the best financial advice any of us can get. What my dad knew then, but my 7-year-old-self didn’t understand, was that in order to get to where you want to go, or to meet your serious financial goals, all of us have to learn to say “no” to those things that get in the way of success. And, the earlier you learn that critical lesson, the fewer mistakes you are likely to make along your financial journey.
If you want to retire early, for example, you may have to say no to the fancy vacations along the way. Or say no to the latest and greatest new car, and keep your perfectly fine, if not very new, minivan that you bought used. And, even worse, you might have to tell your kids no when they want something! With that one simple, yet incredibly powerful word, “no” becomes the most important word in your financial lexicon. Sometimes you just can’t have. Sometimes “no” is just going to be the answer. And, that is not a bad thing. You have to stay focused and keep your eye on the prize. You’ll be better off financially and glad that you said no when you turned down something that you really didn’t need after all.
It turns out that at that particular time, my parents had no money to spare. My dad was a full-time student and working part-time and my mom was supporting a family of five on her secretary’s salary. Those must have been incredibly challenging years for my parents – making every penny count. As kids, my brother, sister and I didn’t know that times were tough. We had all we needed and had a lot of fun doing things that kids and families do. But, that one financial answer of “no” when I was 7 years old has stuck with me for a long time and has largely formed the basis of my financial, saving and investing belief system and practice.
In turn, I’ve passed that same sage advice on to my daughters (and occasionally to my husband!). I have turned “no” into sayings like “When your wallet is empty, there is no more buying.” and “That’s an interesting request, why don’t you put it on your Christmas or birthday list?” I use another of my dad’s favorite sayings, “There’s no free lunch!” with the girls when they want to take advantage of a “free offer” that they see on TV.
Thanks to my dad, I learned to save my quarters and dollars very early for the things I wanted. I still run a budget and save extra change today. And, as importantly, I dutifully live by the “pay yourself first” rule.
Which brings me to my retirement practices: I have always paid myself first in the form of payroll deduction when I worked for other companies. I delight in checking my rollover IRA from a job I had back in 1989. I had rolled $15,000 into an IRA and today it is worth over $100,000. And, when I left my job in the financial services industry after many years, I had amassed a sizeable 401(k) that I have kept invested using a growth strategy. My husband and I continue to save first and foremost for our retirement in Traditional IRAs, his employer 401(k) and my SEP-IRA.
It turns out that the financial advice you dispense to your young children does form the very foundation from which they will make life-long financial decisions. I got much more from that one trip to the store than I can ever thank my dad for. Sure I was disappointed, but in the grand scheme of things, we all have to learn to deal with a little disappointment. What’s important is how we turn that disappointment into something positive and take action to get what we do want. We have to be resilient and rely on ourselves to make things happen. And, we have to value every dollar and make sure it is being directed where we want it to go. These lessons are incredibly valuable and completely necessary to survive and thrive.
So, to all the dads who have willingly or inadvertently dispensed sound financial advice to their kids, your kids are better off because you helped them. To my own dad, I owe you big thanks for your financial wisdom over the years – your fatherly financial advice. Your granddaughters really appreciate that it’s all being passed on to them, too! Who knew one little word could lead to so much sound financial behavior?
Post a note about the best fatherly financial advice you got from your dad.