Experts share money lessons learned from Dad
By Marianne Curphey
Father's Day is a time when we celebrate all that our dads mean to us, and what they've taught us about life.
But what about money matters? We asked some personal finance experts to share what they learned about finances from their fathers' good -- and sometimes less-than-perfect -- examples.
When you have to work for it, it means morePiper Terrett, frugality blogger and author of The Frugal Life: How to Spend Less and Live More, learned about managing her money as a youngster by doing jobs for pocket money.
"My dad taught me from a young age about money," she explains. "I always had to earn my pocket money by dusting the house. [I earned] 50p to begin with when I was seven, although it later went up to £5. That's inflation for you!"
Terrett was permitted to spend her money at the local sweet shop, and she has vivid memories of the store: "One with those big old-fashioned shops with sweet jars with gobstoppers, lemon drops, etc," she says.
Earning her own money to buy sweets taught Terrett how to work out what she could and couldn't afford.
"I had a friend of the same age who was very spoilt and was given everything she wanted without having to work for it, which [my parents] felt sent out the wrong signals," she says. "And I think they were right."
Terrett's father may have instilled some good money habits into his young daughter -- but he didn't always follow his own advice.
"He can also be a bit of a spendthrift, splurging on clothes and hobby-related items," she says. "My mother is the canny financier of the family and has always been the one in charge of the purse strings, so that has also taught me to be more careful with my money."
It's never too early to earn
Yvonne Goodwin, founder of Yvonne Goodwin Wealth Management began earning an income at a young age, helping her father with financial chores.
"From the age of 13, he had me working for my pocket money," she remembers. "He was an accountant and worked for a firm but had some private clients, too, where he did their work in the evenings at home."
Goodwin's job was to do the weekly wages for the staff of one of his clients.
in 1973, that involved getting my head stuck in tax and national insurance
tables to work out their pay, then writing out those little brown envelopes
that people used to get their weekly cash wages in," Goodwin says. "So
without realising it, I was learning a number of things here. The importance
of being accurate -- these were people's wages and they needed to be correct --
and also what it would be like when I'd go to work."
a routine for paying the bills
Goodwin also learned how her father managed the household finances because she saw him sorting out the bills on the kitchen table.
"Back in the 1970s, the post used to arrive in the house at breakfast time," she says. "I'd see my dad open the bills, put them on one side and wait for the 'red reminders' to arrive."
Then she would see him writing out cheques, and her mother would take them to the post office.
"I was witnessing the budgeting going on
in the household," Goodwin says. "It is something that our youngsters don't see
any more, as it is all invisible with direct debits, and we are all
encouraged to have paperless billing. With all that being visible, I didn't need a formal financial education like youngsters do now."
Don't be too cautious when it comes to investing
Philip Pearson, independent financial adviser and director of P&P Invest in Southampton, has used his father's investment strategy as an example of what not to do.
"The most important lesson with money my father taught me is not to follow his example in being cautious when it comes to saving," Pearson says. "His approach was to rely upon a building society account as the only means of accumulating wealth. He had no knowledge of alternative forms of investment."
Pearson says his father's mistakes showed him the need to "speculate to accumulate" by making regular monthly contributions into alternative assets in order to grow wealth.
"Remember the adage that money makes money, but only when invested wisely," Pearson says.
before making rash decisions
Sarah Pennells, founder of SavvyWoman, a financial advice site for women, on the other hand, learned the importance of caution from her father.
"I think the best advice my father ever gave me was not to assume that something that looked like a good deal was actually any good," she says.
There are certain things, such as your pension and your home, that are not worth gambling, Pennells' father taught her -- and his wisdom paid off.
"He was in the civil service pension
scheme but that didn't stop him being approached
by a personal pensions salesman in the late 1980s, trying to persuade him to transfer his pension to a private pension," Pennells says. "He turned them down, thus avoiding becoming a victim of the pensions mis-selling scandal."
Like most households, Pennells says, hers received quite a lot of unsolicited marketing literature and special offers from financial companies -- offers her father was quick to reject.
"To say he was underwhelmed by most of
the offers is putting it mildly," she says.
That's not to say Pennells' father bought only cheap things.
"He also advised me to invest in quality,"
remembers Pennells. "He was a keen gardener and took pride in the fact that
garden tools he'd bought years earlier were still 'as good as new' in his words."
Don't be too loyal
Pennells says her father's only financial flaw was loyalty -- not a bad thing in and of itself, but a dangerous attitude during a time when large financial institutions don't necessarily act in their customers' best interests.
"He was always very loyal his bank, building society and insurer," she says. "I guess it's a generational thing, but he thought loyalty was a two-way street. Sadly, for him, he's been proved wrong."
Published: 13 June 2013
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