Fathers Day Financial Advice Stories

Father’s Day Fun: Best and Worst Financial Advice

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Father's Day offers a day of reflection and thanks for everything our dads taught us, including good and bad financial advice.

Our fathers are role models for some of our best financial traits…as well as some of our worst. I thought it would be a fun Father’s Day experiment to reach out to a few readers to share the best (and worst) financial advice they got from their dads.

Father’s Day financial advice at it’s best…

James, a loan officer in Portland, credits his father for teaching him that debt is a tool instead of a burden. Too many people let their debt scare them and avoid it at all costs. Blogging legends are made of the people that pay off massive amounts of debt and live debt-free for the rest of their life, shunning any type of loan.

Financial Advice Good Debt Bad Debt
Financial Advice Good Debt Bad Debt

James says his father taught him about interest rates and good debt with some pretty creative ideas. A weekly allowance for chores offered next to nothing but James’ dad helped him think of ways to make extra money through small jobs. He would then loan him the money to get started, i.e. buying a lawn mower or other supplies needed, at a fixed interest rate. Loans were also available for other things like going shopping but at a much higher rate. It wasn’t long before James learned that the money borrowed to buy assets for a business was good debt while money borrowed for conspicuous consumption was bad debt.

Tina shares how her father taught her good budgeting ideas and to pay herself first. From the allowance she earned, he helped her budget for buying clothes as well as things she wanted but didn’t necessarily need. He taught her to take a little out for savings before budgeting for expenses like clothes, school supplies and costs for extra-curricular activities. This way, she always had a little bit going to savings and had enough to buy a car when she was 16 years old.

Taking out money for savings is one of the essentials to an earlier post, setting financial goals and a budget you can keep. A lot of people start their budget with expenses and find that they’ve got nothing left at the bottom of the page for saving. They avoid debt but never get a chance to build their nest egg and meet their financial goals. Taking money out for savings first means real money discipline when it comes to expenses and meeting your financial goals in the future.

…and the worst financial advice

Bad financial advice usually comes in the form of bad examples rather than someone giving us bad advice. A few readers were generous enough to spill the beans on their dads if we agreed to leave their names out of the article.

More than a few readers watched their dad lose a lot of the family nest egg to bad stock market decisions. One reader even remembers seeing his dad cry for the first time after the stock market crash of 1987. We all want the best for our families but it too often leads to chasing high returns in stocks and putting too many of our financial eggs into that basket. Visions of Ivy League educations for the kids turn to questions of how you’re going to even help pay for college when a stock market crash cuts your savings in half.

Fathers Day Financial Advice
Fathers Day Financial Advice

Holding a mix of different assets; stocks, bonds and real estate, in your investment portfolio is one of the fundamental investment basics. When prices of one group plunges, your investment in the others will help smooth returns and not lead to panic selling.

One reader talks about how he watched his father mismanage the family’s money and sink them into a debt spiral that ended in bankruptcy. Overspending on everything from eating out to clothes and cars lead first to credit card debt then to payday loans. The interest charges on payday loans started piling up so even when the family cut its overspending, it just couldn’t get back on top. His father was eventually working two jobs but they were still living week-to-week because they needed a new payday loan to cover the interest on the previous loan. There was no way out but to file bankruptcy and start over.

This last one is extremely common, especially leading up to the recession of 2009 when everyone was buying super-sized houses. When the economy turned and people started losing their jobs, side-gigs and part-time work wasn’t going to keep families afloat. A lot of people turned to payday lenders and fell into a debt-spiral.

I don’t want to end this article on a down note so I thought I would share my own Father’s Day financial advice I learned from my dad. I don’t know what my own dad did exactly but he turned a C-student, class clown into a straight-A pupil in just a few years. It may not have been financial advice but educational-turnaround landed me a full-tuition college scholarship through the Marine Corps and eventually the financial freedom to do what I want.

When my mom and (step) dad married in 1985, I was already well on my way to the wrong way to get your life started. In fifth-grade, I was much more interested in getting laughs than getting grade and it had been that way for years.

In middle-school, my dad started making me devote an hour or two to homework every night. He also started rewarding good grades with $1 for every A on a report card ($1 was a lot more incentive back then). He helped me to see the importance of a good education by looking at different jobs and the educational level you need to get those jobs. It didn’t take long for me to realize that I didn’t want the jobs you could get by slacking off in school.

Whether you sit your kids down to share the facts of life or pass your knowledge on through example, make sure you’re passing on good financial advice. Your kids will thank you for it and you’ll know that you did the best you could.

Happy Father’s Day!

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