“Do you know why, when birds fly in a ‘V’ formation, one side is almost always longer? Because there are more birds.”
When I was growing up, that was my dad’s favorite dad joke. He told it every time we saw birds in the sky, laughing while we rolled our eyes.
As a dad myself, I know now that dad jokes aren’t the only timeless gems we have to offer. Many of the best lessons about life and money I’ve learned came from my dad.
So, in honor of all the dads out there for Father’s Day, we’ve put together a list of the top five money tips from dads at Student Loan Hero (SLH), in no particular order.
1. Self-reliance is the key to good money management
Growing up, I thought my parents were poor. When I went to prom in high school, I had to pay back the money my dad fronted me. A year later when I went to Southern California on a choir tour, I had to pay for it on my own.
When I started college, I didn’t get any financial assistance from my parents. But at that point, I knew that it wasn’t because they didn’t have the money. Instead, they wanted me to learn to become financially self-reliant. My dad helped me fill out the Free Application for Federal Student Aid form and encouraged me to learn about the various ways to pay for college.
Because of those lessons, I was able to avoid student loans for the most part, and my total student loan balance was well below the average at graduation.
Since the cost of college is growing exponentially, I plan to save money to help my kids pay for their college expenses. But I’ll encourage them to take ownership of their money management and learn how to become self-reliant.
2. Make your money work for you
Saving money is always a smart idea, but where you put it is just as important.
“I come from a family that really valued saving,” said Marlon Gutierrez, a senior marketing manager for SLH. “The problem was that I started saving too much.”
Gutierrez started looking for investment opportunities to increase the return on his hard-earned money.
“I want to teach my daughter that money is of no use in the bank and that she should actively seek investment opportunities where she can put her money to work,” he said.
Keep in mind that you might want to keep some cash in your savings account for short-term goals. Investing money that you’ll need in the next year can make things more complicated than necessary.
Mike Kitchen, an executive editor on SLH’s content team, wishes his kids would take money more seriously. “Literally, they’ll sometimes misplace the money we give them,” he said.
But at the same time, Kitchen wants his kids to learn that there’s more to life than money. “We don’t want to turn them into people who are obsessed with finances,” he added. “For me, I think it’s a balancing act.”
Kitchen’s philosophy is similar to the money-can’t-buy-you-happiness mantra. Being financially independent can make your life easier, but not if you’re still preoccupied with making more money.
On the flip side, being careless with your money management can keep you up at night as you consider how you’re going to pay your bills, let alone achieve your financial goals.
4. Use credit cards responsibly
“As a kid, I remember yelling at my parents one time I wanted something, saying, ‘Just put it on the credit card!’” said Dan Shepard, one of SLH’s copy editors. “I didn’t know that was money.”
As he’s grown older and wiser, however, Shepard has learned that credit cards can cripple you financially if you misuse them. While he uses a card frequently, he’s never paid a cent in interest. “Credit cards can be awesome if used properly to get some pretty sweet rewards,” he said. “But they can also hurt you. I want my son to know the difference.”
The best way to keep yourself from overspending on a credit card is to maintain a monthly budget and use the card only when you have enough cash in your checking account to pay it off. Then be sure to pay off your balance on time and in full each month.
5. Give whenever possible
“My father grew up in a small, rural town in Ecuador,” said Frankie Rendón, a media outreach specialist for SLH. “His family had very little money, and they often struggled to make ends meet.”
Things improved when Rendón’s father moved to the U.S., and he worked hard to provide his kids with things he never had growing up. But he never forgot his roots.
“He always stressed the importance of giving to those less fortunate,” said Rendón. “He regularly volunteered in his community and gave monetary gifts to our church and local charities. He operates under the belief that one should always be generous with their financial resources, and he made sure to instill those values in his children.”
Rendón’s daughter is young, but he’s looking forward to teaching her the same values. “Right now, it feels like the world is full of brokenness,” he said. “Maybe she’ll help fix it.”
Learning from those around you
Father’s Day is a day to celebrate dads and father figures for the contributions and sacrifices they make to enhance their children’s lives. As you consider the financial lessons your dad taught you or if you want to teach your children, ask yourself how you’re doing with implementing the advice in your own money management efforts.
If you find there’s room to improve, take the necessary steps to do so. For example, if you want to teach your kids to be more giving, find more ways you can contribute through monetary donations or your time. If you want to show your kids how to maximize the value of their money, find ways you can invest more for the future.
If you’ve had a father or father figure while growing up, use this Father’s Day as an opportunity to thank him for the lessons he taught you. And if you’re a dad with kids, think about some of the financial tips you want to pass on to them.