I firmly believe in the importance of intentional parenting. I believe, as a parent, that it is your responsibility to ensure that your children walk this planet with a minimum level of financial common sense. The unfortunate part of this is that your parents may have done a crappy job teaching you financial common sense. Okay. Fine. I'll step in and do some late-stage parenting on their behalf. Before I go much further it is important you know that when I say "skills your dad should have taught you", what I really mean is "skills your PARENT(s) should have taught you." I'm worldly enough to realize that we didn't all grow up in two parent households. Hell, some of us had two dads. That's cool with me. But my job is to teach you things that "whoever" didn't teach you.
If you understand and practice these five things, then I'm relatively confident that you will have a pleasant financial. Don't currently have a pleasant financial life? That might be because you never learned/practiced one of these five essential financial tenets. These literally are the elementary basics of money. Some of my posts are complicated, some are quirky, this one is simply basic. If my children learn nothing else from me, I'd like them to learn these five things.
Save first- Do you want to know why you (may) live paycheck to paycheck? It's because you don't save first. If you are juggling your bills in order to pay them on time, then it's because you never set money aside for the future. I know it sounds bat-shiz crazy to think that you will have more disposable income if you eliminate some of that disposable income from the get-go, but you will. Please trust me on this one. If you never have any money, it's because you have created a psychological dependency to spending all of it. You need to employ scarcity. You do this by removing some of your resources (income) from the jump. You can't wait to see what's leftover at the end of the month, and save that. It doesn't work that way.
Tip well- I have never really understood the rationale behind being a bad tipper. I believe that your understanding of the customer/server relationship says a lot about you. I often take potential hires to a business lunch and let them do a majority of the interacting with the waitstaff. I then observe their interaction. If you value every single person in a restaurant, no matter how small the perceived role, then you will inevitably value your assets more. I think it's a self-awareness thing.
Don't even get started with credit cards- As President Obama so eloquently said in late July of 2011, "Now, every family knows that a little credit card debt is manageable. But if we stay on the current path, our growing debt could cost us jobs and do serious damage to the economy." Thanks, Barry. Why don't you just say that obesity is healthy too? If your parents struggled through the trials of credit card debt, and hid the pain associated with it from you, then you probably have experience borrowing issues of your own. It's a pretty simple formula. Don't want to get eaten by your pet tiger? Don't have a freaking pet tiger!!! Don't want to get into credit card trouble? Don't even get started with them. They aren't at all necessary.
Don't gamble, but if you do, pay your debts- My dad always told me that he worked too hard for his money to risk it gambling. This always stuck with me. Yes, I know that I'm a killjoy, but I can't imagine betting on the ponies when I don't have my daughter's college fund fully funded. You and I both know several people who care WAY too much about insignificant football games because they have money on the road team. It's unsightly. I'm just sayin'. But if you make silly wagers with you buddies, pay your damn debts.
Life insurance isn't about anything other than love- I remember when my dad explained life insurance to me. It was weird. He said that he paid some random company money every month in order to make sure that if he died, mom wouldn't lose the house and have to go back to work. I had to have been like 10 or 11 or something. At this point I still thought that money grew on trees. Plus, I was pretty sure that my dad was invincible. Twenty some years later, and nine deceased clients (less than 40 years old) later, I'm glad that he had that life insurance conversation with me. You don't buy life insurance because you are afraid of dying, you buy life insurance because you love your family. End of story.
Do you have any important lessons that your dad (parents) taught you?
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