Father's Day financial lessons
Some important financial lessons passed down from father to daughter.
With Father's Day just around the corner, I'm facing the first one without my dear old Dad who slipped away quietly at the age of 89 in January. Contemplating his life, I have come to the realization that we were very different people but we did share a keen interest in money and business.
Much of what I do today has roots in financial lessons he taught me. Interestingly, my Dad was never particularly good with money, mainly because he had a flaw that kept him from achieving financial freedom. He could never deny my restless mother in her endless search for the perfect home - 16 of them over 42 years. It was a very expensive habit for people of modest means.
But he taught me some important lessons. Here are a six of them:
1. Stay put. Early on Dad told me, likely after considering the state of his bank account following yet another move, that I should buy a home and stay in it forever. He repeated that over the years and it is probably the smartest piece of financial advice that exists.
2. Invest in education. My grandfather pulled Dad out of school at age 13 and enrolled him in the British air force. A job, in those pre-World War 11 years was far more important than education. Later Dad finished high school and earned a B.A. while in the Royal Canadian Air Force.
Then at the age of 52 he graduated from law school and practiced for the next 17 years. He never actually earned a large income as a lawyer. In fact, I think he was terrible at insisting people pay him and was a sucker for a sob story. But education for him was as much about satisfaction as money.
This is a good lesson for today's youth who have been schooled by parents and the system to connect education directly with a job down the road. Education is an investment that pays off in many more ways than simply future income.
3. Balance your chequebook. I used to marvel at the military precision of my father's chequebook. Every purchase was recorded and subtracted from the previous balance. At the top of each page the balance was carried forward and my father always knew exactly how much money was left in the account.
He used to chide my mother because she wrote down her cheques but never did the subtraction. She claimed to keep the balance in her head, and she probably did, but Dad would often take her chequebook and quickly do the math, just in case.
It is a good lesson for 2012 with the ease of debit cards, e-transfers, automatic billing and smartphone swiping. They all make spending more convenient but it is far too easy to lose track of what is left in your account. Fortunately, there are now many apps to help do the job my father once did after every purchase.
4. Make time for money. My father always set aside time to pay bills and contemplate the family finances. He would sit down after dinner in a quiet corner (not easy to find in a small house inhabited by three children and a dog) with his bills, bank statements and a letter opener. Bills were paid, the payment date noted, recorded in his chequebook, then meticulously filed.
Cornering a piece of your week to get caught up financially is far better than facing a panic after a couple of months has passed.
5. Love your pension. After he left the military Dad had the opportunity to buy back some years of his defined benefit pension (DB) plan. He and my mother debated vigorously about this as they were on the hunt for another house. My father prevailed and that decision eventually meant a much better income during retirement.
Today DB plans are on the wane but contributing regularly for retirement does yield enormous dividends decades down the road.
6. Small is beautiful. Aside from moving too much, my father told me he wished they hadn't spent what was then called the monthly Baby Bonus. Dad realized that if the money had been saved they would never have missed it and after 18 years we three children would have had a nice pot of money for education.
So, kids of all ages, you may not think your Dad is particularly money savvy but I'm betting every father has lessons to pass on from the experiences of a lifetime. This Father's Day ask your Pop for a few financial words of wisdom.
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