Father's Day 2010: Money Lessons That Were Dad's Gift to Us

Father's Day 2010 is this Sunday, so what better time to tip our hat to Dad to thank him for the financial wisdom he instilled in us while we were growing up--lessons that we live by to this very day. I asked my Savings.com cohorts to share the frugal fatherly advice that has helped them navigate money issues in their lives. Here's what they had to say:

Many of my co-workers responded with the simple yet powerful axiom: "Pay yourself first." These wise words provide a solid foundation for financial stability. As Ray's dad told him,

"Before you pay any bills or go out to dinner pay yourself what ever you can and save it for later.  It comes in handy to have that extra money when you get in a pinch."

Loren's dad offered more specific guidance,

"Pay yourself first. Take at least 10% of your check and put in bank immediately. Then pay bills. Otherwise... The bills will always rise to meet your income."

And Yolanda's dad agrees, telling her to make sure to contribute to savings and 401k before splurging on anything else.

Clodagh's father also touts the benefit of savings:

"[W]hen I came into a bit of cash recently my Dad called me up and said 'Clo, you're as useless with money as I am so get that cash somewhere where you can't spend it!' He's completely right and that was one of the most sage piece of money advice he's ever given me."

The other most repeated lesson was to avoid debt. Clarice's dad always told her not to spend money BEFORE you have it as did Craig's pop who told him to never buy anything that he couldn't pay cash for (with the exception of real estate). Alan's father echoed this advice:

"My dad is absolutely anti-debt, so his lesson to me was that financing or leasing was unthinkable in his book, if you can't afford to buy it outright without interest etc. then you can't have it! Home mortgage is the only thing I've ever known him to make payments on.

This is also one of my father's most important financial lessons to me--I always pay my credit card off in full and on time. Not only do I avoid debt (and the horrific revolving interest payments), but my financial responsibility is reflected in my good credit score.

Holly's dad has a different take on credit card debt:

"My dad's a wizard with finances, but oddly, his advice is often contrary to what all the experts say.

One of my favorite examples is that he believes people should avoid completely paying off a credit card balance, because he says people have a debt threshold. Therefore, paying off the balance in full will result in more spending to meet the debt threshold next month. Of course, he feels balances should be low, just not low enough to stimulate a spending spree to fill up that void. And as much as he loves giving advice about credit cards, he has never carried a dime of debt on his own cards."

Other fathers offered sound spending advice--like Diane's dad who taught her to avoid spending sprees:

"My dad taught me early on to evaluate before making an impulse buy. Every time I asked for the latest teen must-have, he'd remind me to ask myself if I really needed it. I can't say I have been able to resist all indulgent purchases, but it definitely reminds me to think about price comparisons and waiting for sales."

Jill's father advised against materialism:

"My Dad taught me that money is best spent on others... spending time with others, showing them a good time, having fun...keeping up the the Jones' with clothes, cars, etc. doesn't ever really get you anywhere but memories of a vacation or at dinner with others can last a lifetime.

Pete's dad taught him to play it safe when it comes to finances: "When I was in Vegas with my dad, he told me "Son, I only gamble in business."  Then we went to see a show."

Other the other hand Sheryl's dad offered this pithy piece of wisdom: "Be wise, but don't be stingy," while Guy's father told him, "Spend it now, you can't take it with you."

Woody obviously got his DiY Mr. Fixit skills from his dad who taught him to never throw anything away if there was a chance of fixing it.  "Sometime, we only had stuff because someone else was throwing it away, and he fixed it," he recalled.

Lisa credits her father for teaching her about having a strong work ethic and financial independence:

"My Dad has instilled in me the lesson to work and make my own money. At the age of 16, he taught me how to work and save in order to buy the things I wanted in life.  For example, in high school he offered to pay my car payment, just as long as I got a part-time job to pay for my insurance.  With this notion, I have become less dependent on my parents for money and it's made life much easier to know how to make money, prioritize my monetary spend and save."

The father of Jacob S. also had some specific tips on financial independence advising him, "If you are going to start a business, start it on your own and don't take on a business partner."

Kip's dad wisely taught him to plan for the unforeseeable:

"The best lesson my dad instilled is to expect the unexpected. Car repairs, health care costs, etc always come out of left field no matter how well you try to budget."

Sara had this to say about what she learned about money from her Dad:

"My dad didn't so much teach me this as I observed him doing it year after year, but he taught me to keep my money in unusual hiding places...pennies in a wooden box in the bottom of my closet, meticulously straightened and organized bills rolled up in a tube sock. You know...totally normal places like those. Honestly, I may have learned it, but I don't practice it...I prefer my money in a bank."

Joe G. reminisced about two important bits of financial wisdom from his father:

1. You see money on the ground, you pick it up.  Period.
2. Never loan money to anyone but immediate family.  (I never listen to this one.)

I, too, have fallen victim to not listening to this sage advice and have regretted it.  As a follow-up to Joe's dad's advice, I would add considering any money given to a friend or relative as a gift.  It may not work to absolve bad feelings, but it will help determine how much you can afford to part with if you basically treat it as a loss up front.

The paternal prudence of Greg's dad is the always classic "Money doesn't grow on trees."  In addition, Greg's father counseled: 

"You need to work hard and smart to make money and you need to save and invest it... Albert Einstein said that the most powerful force in the universe is the power of compounding."

I'm not so sure Albert Einstein said any such thing (just as I doubt my dad had to walk five miles uphill each way to school every day...), but the lesson about saving is a good one.  So from all of us at Savings.com, Thanks Dad and Have a Happy Father's Day!