A Daughter Looking Back on Her Dad's Money Lessons
My dad has always been a saver. When I asked him why, he explained that his father who came to America from Hungary was always struggling to make ends meet. My father was determined not to live that life. So at an early age, he began saving so that he would accumulate a safety net and not have the same financial pressures his parents did. He passed his wisdom on to me in hopes that I too would live a better life.
With prices for basic necessities increasing so drastically these days, I’d like to share six money tips my dad instilled in me early on:
Tip 1: Start saving early.
When I was a kid, along with every birthday gift, my father would give me dollars equal to my age and say, “Don’t spend it all in one place. Put some away for later.” So I’d spend some and save some. By the time I was 20, the birthday, babysitting, and summer job money I had saved added up to a couple thousand dollars.
Tip 2: Be an educated buyer.
Whenever we’d shop together, my dad would say, “Know how much things cost so that you don’t overpay. Even if you’re not making a lot of money, you can still have money by being an educated buyer and a careful spender.” When I was growing up, my dad would go from store to store looking for the best deals. And every weekend he’d cut coupons from the paper. Now, with the Internet, we can comparison shop and get coupons within minutes.
Tip 3: Avoid impulse buying.
When I got older and wanted to buy something frivolous and expensive, my dad would say, “think about whether you really need it and whether you’ll want it a few months from now.” Over the years, those words saved me from digging into savings to make several impulse purchases. I have long forgotten what the items were, so I guess they were things I didn’t really need or want.
Tip 4: Start saving for retirement early.
My dad has always been self-employed, so he had to save for retirement on his own. He started saving for retirement in his early thirties by setting up an IRA. When I got my first job, he told me to sign up for the company’s 401(k) plan so that I could start saving earlier than he had and take advantage of any company match and compounding interest. My dad, who’s 61, has accumulated a comfortable retirement nest egg by starting to save for retirement 30 years ago. My husband and I have been contributing to our 401(k) and rollover IRAs plans for the past 15 years and already have a nice size nest egg, which we hope will grow over the next 25 years until we reach retirement age.
Tip 5: Live within your means.
When my husband and I started house shopping, my father chimed in with these very important words: “Live within your means so that you can sleep at night.” Rather than buying a big house, we bought a modest yet comfortable one so that we’d have a manageable mortgage payment and some money left in savings. After experiencing layoffs in the same year, my husband and I were grateful for this advice!
Tip 6: Give to charity.
My dad believes that you will get back what you give to charity in one way or another—a raise, promotion, or gift, and the satisfaction that you helped someone less fortunate.
This Father’s Day I’d like to thank my dad for his wise words.