10 Money Lessons I Learned From Dad

By Paul Michael on 16 June 2016 1 comment

It's Father's Day soon. In honor of all the dads out there, I thought it would be great to look back on some of the marvelous advice my dad gave me over the years. I'm sure a lot of the advice on the list is familiar to you, as the generation before mine passed down much of the same knowledge to all of us. Still, it's always advice worth following, and has saved me thousands of dollars over the years. Here are 10 tips from my dad, that I now pass on to you. (See also: 3 Smart Ways to Save on Father's Day)

1. Don't Throw Good Money After Bad

When my dad first told me this one, I was too young to really understand it. Honestly, even in my midteens I wasn't exactly sure what he was getting at. Then, when I became an adult with an income, and the means to make my own purchases, I got it. First, it was buying a cheap used computer that I had to pour a bunch of money into to make usable. And even when it had the best specs, it was still not as good as a new one, which would have been faster and cheaper.

From projects that suck money and time and have no profitable outcome, to investments that keep tanking despite a constant injection of cash, I always remember what my dad told me: Don't throw good money after bad.

2. Do a Job You Love, and You'll Never Work a Day in Your Life

Oh, how right he was on that one. I know it's not really my dad's quote, but it didn't stop me taking it to heart. From as long as I can remember, I have loved drawing, painting, writing, and creating. I did everything I could to follow a career path that utilized those skills, and today I am a creative director in advertising and entertainment — and I also get to write articles like this one.

Sometimes, I feel a bit guilty about getting paid to do something day in, day out, that I really enjoy. And that is the best way to make money; when you aren't even trying. So if you are not yet out of school, follow your dreams and find a job that you will enjoy, if you can. If not, find a way to make money in your spare time by doing something you love — whether it's fixing cars, painting murals, or singing. When you love it, the money is not hard work. It's not work at all.

3. Buy Cheap, Buy Twice

As someone who loves a deal, I did not take this advice word for word. I don't believe in paying full price for anything, and that could be considered "cheap." But I like to buy quality items at a lower price. What my dad was saying was that if you buy a cheap tool or a bargain bucket t-shirt, you cannot expect either to last. It's far better to pay $30 for something that will last you a few years, than $10 for something that will last only six months. If you're digging around in the dollar store bins for screwdrivers, you can guarantee you'll be back for a replacement much sooner than if you had picked up a quality item from a hardware store.

4. Don't Buy Champagne on a Beer Budget

"Wait Dad, we never have Champagne." "Exactly," was his response to me. I grew up in a working class home in the northeast of England. We rarely ate out, and when we did, it was cheap. I remember coloring in pictures every month at the same cafe because "kids eat free if they color a picture." My parents never splurged, except at Christmas (which was a case of going overboard to make up for the rest of the year, I think). We bought food once a week, on Friday, and if we wanted something before then, we had to wait.

I learned this lesson well. I don't have massive loans or a ton of credit card debt, I have a modest car, a small home, and I live well within my salary every month. This is probably the most important lesson I ever learned, and it has stood me in good stead.

5. You're Never Too Young to Save

Whether it's for retirement, a savings account, or just something on which to spend your allowance, saving was drummed into me from an early age. "Pay yourself first" was another way my dad put it.

I had a savings account at the local bank when I was 10 (the Natwest piggy banks were awesome). At 22, I started saving for my retirement. Even though it was just a little each month, the power of compound interest is working its magic on that some 20 years later. Some people say you should live for today, because you'll be too old to enjoy it later on. I certainly don't think you should save everything and live a Scrooge-like existence, but plan ahead, and start saving as soon as you can, with whatever you can. You are going to need it.

6. There's Nothing Wrong With Second-Hand

Many of my friends growing up had new clothes, new bikes, new toys, and new backpacks every few months. I did not. I did get new things, but I made them last. However, I was taught early on that there was no stigma or shame in buying used items. It is a lifestyle choice I continue to practice, and it saves me a lot of money. Used cars are way cheaper than new ones. I will go to Craigslist for appliances, electronic items, tools, and, well, anything else that I need. I will search for "factory refurbished" or used before new. The only exceptions I have on used items are footwear, underwear, and safety items (think infant car seats).

7. Find a Way to Afford It

I grew up around the haves, and have-nots. I would say for the most part, I was in the latter category, but only because the haves were those who had everything they ever wanted. However, if I wanted something really badly, my dad would tell me, "Figure out a way to make it happen."

If my allowance wasn't enough for the book or DVD I wanted, I'd do odd jobs or get a paper route. I would sell things I owned to get something else (I still regret selling my entire Transformers toy collection to get a CD player… oh, if I had foresight). But today, the same is true. I'll work extra hours. I'll hustle freelance gigs. I will find ways to make it work, rather than the usual "slap it on the credit card" routine so many people follow.

8. Don't Shop on an Empty Stomach

Have you ever done this? It's a nightmare. Everything you see, in every aisle, looks fantastic. You may have a shopping list (in fact, my mum insisted on one) but it goes out the window when you shop hungry. You throw all sorts of food into the cart, and before you know it, you're checking out with way more than you need. Sometimes, you buy so much it goes off. Or you blow your budget for the week, and realize half the stuff in your cart is junk. So, before I do my shopping, I grab a bite. Even if it's just a granola bar, it can really stop those hunger pangs from taking over, and turning you into the "eyes bigger than your belly" monster.

9. Knowledge Is Money (and Power)

The more you know, the better the deal you can get. My dad taught me that from an early age, and to this day I am a research freak. Of course, he didn't grow up with the Internet, so he had to work a lot harder to find bargains and hustle great deals. So before I buy anything, I do my homework. I comparison shop. I ask friends and family. I talk to insiders, or visit forums. For me, buying something without knowing as much about it, and the buying process, as possible is just throwing money away. And knowledge is also power in this context. If you're armed with it, you can negotiate from a position of strength. Know you stuff, it will serve you well.

10. Learn How to Fix (and Make) Things

From as long as I can remember, I was helping my dad out with DIY projects. We didn't have a lot of money growing up, but he certainly knew how to stretch it out. Buying materials to build something was way cheaper than buying it ready-made. Coffee tables, lamps, desks, computer cases, fire surrounds, you name it, he built it. He was really good at it, too.

Over the years, he must have saved so many thousands of pounds (as I say, I grew up in England) by making his own things, or fixing things instead of paying for repairs. I try to follow in his footsteps, although sadly, I didn't get his knack for woodworking. But I will look up ways to repair things that are broken, or follow online videos for things like replacing brake pads or cabin filters. Whenever anything is in need of a repair, my dad is in the back of my head saying "Hey son… you can fix that, go on, give it a go."

Happy Father's Day, Dad. I love you, and wish I could see you more. You're my hero.

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Guest's picture
Mike @ blogsofstuff.com

I love these articles and the knowledge that can be passed on from generation to generation. I also wrote about Fatherly financial advice at blogsofstuff.com and already find myself teaching the same lessons to my children that my father taught me!

Guest's picture
Belen E

Since last Sunday was father's day I passed to read this article and everything it said is true about it, I identificate myself in number 8 with never shop with an empty stomach (I always do that) and its a nightmare too!
In addition to number 2, I think that the best jobs are the ones you are in love with them and compromised with yourself, being open to every situation life gave you and be happy with it.
I have fun reading this article, thanks for sharing.