Growing up, many of us looked to our fathers for advice and in many families dads have been the main dispensers of financial wisdom. In honour of Father’s Day, we’ve collected some of the smartest pieces of financial advice dads have been known to give and some reminders on how you can practice dad’s sound advice.
Remember way back when you got that first pay cheque? Did your dad caution you not to spend it all in one place? Maybe you were unwise and ignored dad's advice and went overboard, spending every penny on video games, clothes or movie tickets. In that case, you likely daydream back to your younger self and think, “I should have listened more to dad”.
You may not have known it at the time, but he was likely building you up to the golden rule: pay yourself first by putting 10% of every pay cheque into savings. That way, you can leverage the magic of compounding to build a nice nest egg for your future.
Were you ever aware that your dad was saving for retirement? He may have quietly been doing this behind the scenes. Or maybe your dad shared with you his retirement dreams of golf games, trips to the Bahamas, or cottage gateways frequently. Whatever his style, he was likely saving for his future and presumably advised you from a certain age to do the same.
If you haven't already, follow his lead now and plan accordingly by putting aside how much you need to live comfortably once you retire. This retirement calculator can help determine how much money you'll need. Then, to help you figure out how to save, use this budget planner.
"Debt leads to fret."
Think back. Did your dad co-sign to help you get your first credit card? Or did he chip in with a down payment on your first car or home? Your dad was likely over the moon about your transition into adulthood and was happy to help you kick things off when he could. However, while he gave you a jump start, dad's intention wasn't to bury you in debt.
Did this jump start come along with advice? For example, did he share some helpful tips with you like how high interest rate debt should be paid down first? Or if you have a mortgage or a car loan, consider switching to weekly payments to pay down the principal faster and take advantage of top-up benefits by putting in extra money whenever you can. Did your dad also tell you that if you have high-interest credit card balances, to consider consolidating all your debts into a lower interest product like a line of credit? No doubt that he was worried and wanted to make sure you were prepared to properly manage your finances.
“You can never be too prepared for an emergency.”
Remember when the roof or furnace needed to be repaired? There is probably one incident in your childhood or youth where you remember when something needed to be fixed urgently at home, and a professional other than handy dad needed to be called in.
Experts and likely dad himself advise having three to six months' worth of living expenses set aside for emergencies. Appliances, furnaces, roofs, and cars can be unpredictable. The best way to prepare for the unexpected is to put money away so you don't have to dip into your investments in an emergency.
“An investment in knowledge pays the best interest.”
Every parent wants to set up their child for success and giving your child access to higher education is a great way to start. Did your dad help pay for your post-secondary studies? If he did, he likely had a savings plan. If he didn’t, he likely wished he had.
Start saving for your own child’s education with a Registered Education Savings Plan (RESP). The sooner you start saving, the longer you’ll have for your money to grow. You can select the appropriate contribution option for your family, and you’ll be opening the door to a future filled with possibilities for your child. CST Consultants can help you plan according to your budget and goals.
There you have it: some of the best words of financial wisdom that dads have uttered over time. As you reminisce about your own dad's financial advice, be sure to give him a big thank you this Father's Day. Let him know you appreciate all his financial wisdom, big or small, and to all the dads and dads-to-be out there… keep that valuable and precious advice coming.
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