The Money Lessons My Dad Taught Me Shaped My Finances Forever—but One Vital Lesson Was Missing
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- My father instructed me to live within my budget and always avoid carrying credit card debt.
- He likewise imparted to me the significance of being charitable.
- I only hope he had the chance to teach me more about investing in stocks.
My father originated from humble beginnings. His grandfather was a fisherman in St. Ignace, Michigan. He spent his childhood during the Great Depression. Additionally, he served in World War II.
As a result, he needed to be prudent with his funds. He passed this prudence on to me, and I have been applying it to managing my family’s finances ever since.
Reflecting on the past, I recognize that my parents got many things right. Their guidance regarding finances enabled my spouse and me to live entirely free from debt—including retiring our mortgage a full fifteen years ahead of schedule—and I am immensely thankful for this.
Here, you will discover some of the lessons about finance my dad imparted to me... along with something I hope he would have shared as well.
1. Always ensure your spending does not exceed your income.
My father strictly adhered to this principle. He emphasized repeatedly that debt was unfavorable and insisted I should always repay what I owed as soon as possible. Ideally, he believed one should not owe anybody anything at all.
How can you manage this? Ensure that your bills and expenditures always stay below your income level. (This is one approach best budgeting apps can help with this.)
It wasn’t simple, particularly during the initial phase of our marriage. It was akin to us as two financially struggling youngsters attempting to navigate life side by side. Fortunately, we unified our financial strategies so that neither spent beyond what both earned combined. This has ensured we always live within our means.
2. Settle your credit card bills by the end of the month.
Even though Dad expressed strong views against debt, he had no problem with it. credit cards He did not adhere to Dave Ramsey’s view that credit cards were detrimental. Rather, he thought they could be used responsibly... provided that one pays them off in full each month.
Late fees and interest rates can kill your ability to be financially responsible. But because of this rule, I've never had to pay either on the credit cards I've held since I was 18 years old.
3. Be generous
Why achieve financial freedom just for your own gain? My dad instilled in me the importance of being generous yet prudent with what I give.
You can make smart financial choices and still support those who are facing hardships. For this reason, I strongly endorse Team World Vision (a group that organizes races to fundraise for clean water initiatives) and also contribute to my neighborhood church along with other groups that assist people's needs.
I never find myself constrained by my talents. I'm aware that funds will be available at the end of each month to donate to these charities.
What my dad missed
My father did many things correctly when it came to instructing me about money matters. However, there’s something I hope he had covered more thoroughly with me.
What about that? The stock market.
He consistently urged me to put money into improving myself. 401(k) I only paid attention to this bit of financial guidance later in my adulthood when I sensed myself becoming more financially stable—oops—but he wasn’t too fond of it. investing in stocks .
As a child, there were certain stocks I considered buying. Nonetheless, he recommended staying away from stocks unless they were part of your retirement portfolio.
Today, whenever I examine the performance of stocks such as IBM, Apple, and Microsoft, which I could've bought into, I feel like shedding tears. The prices for these shares have climbed significantly. It makes me regret not heeding Warren Buffett’s guidance about investing in sectors one understands well. I was familiar with tech stocks; I grasped how they functioned. Yet, somehow, I did not take action.
I'm breaking this piece of bad advice and have begun to invest in single stocks that I know and understand. I believe I have a firm grasp of the knowledge involving these stocks and I am seeing them pay off with my long-term investment strategies.
I'm grateful for the wisdom my dad imparted to me. He's helped me become financially stable and secure well before most people my age. My wife and I are excited to see where the next steps of our financial journey will take us and how we can bless others as we continue to honor my father's legacy.
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