Cracking lame jokes aside, dads are usually our first teachers when it comes to money. Their wisdom not only shapes our personal growth but also deepens our financial knowledge.
Back in the days when internet banking and ATMs were unheard of, most fathers would make their children visit the banks and stand in long ques for deposits, withdrawals, etc. However much we hated it then, not only did we learn the basics of banking, this experience also taught us the virtue of patience. Thus, in most cases, our fathers coached our financial intelligence from childhood, sometimes without even formally making us aware of these financial disciplines.
This Father’s Day, let’s take a walk down the memory lane on some of the common financial wisdom that they helped us inculcate.
1. Financial discipline
Fathers are synonymous with being strict! And largely responsible for introducing the concept of discipline in our lives. From discipline in eating on time, sleeping on time and studying on time to sticking to the budget. Yes, they always ensured that all the family’s requirements were met without breaching the budget. From the type of cycle they would buy for us to the kind of vacation they would take their families to, it was always within the budget.
Remember those annoying instances when our fathers asked us to explain how exactly we spent our pocket money? But today, thanks to those lessons, we realise the value of being financially disciplined.
2. The habit of saving
Our parents also taught us to put coins in a ‘gullak’ or a piggy bank. Whether it was a festival, a visit from a relative, pocket money, or even leftover change, the money that was received invariably went into it. This taught us that saving for the future is an important commitment, and you should try to save at least 20% of your income every month to meet your financial goals.
3. Differentiating between ‘needs’ and ‘wants’
Remember how angry you got when your dad didn’t buy you that fancy video game? Guess, now you realise that he was actually right in refusing to budge for certain random expenses. Our fathers have taught us an invaluable lesson to know how to differentiate between ‘needs’ and ‘wants’. Yes, we must learn to prioritise our spends and try our best to stay away from reckless overspending. Cutting down on wasteful spends is the key to boosting our savings, raising investment capital or even getting rid of debt.
4. Planning your spends
Our fathers may have been strict with us at times, but that doesn’t mean they didn’t do anything for our happiness. Be it taking the entire family out for the annual vacation to buying us our favourite clothes and shoes during festivals, they were always there to bring a smile on our faces. They did this by planning. The lesson being frugal living doesn’t mean you don’t indulge at all. All you need to do is to make a plan even for your leisure spends like vacations and gadgets, set a timeframe for it, and channelize your savings and investment returns in such a way that you meet the goal in time. Unplanned overspends, especially big-ticket purchases, can drain our savings or leave us indebted. Plus, it’s way more satisfying when you meet your financial goals after successfully implementing your plans.
5. The importance of insurance
Our lovely dads always care for our safety and security – remember how they used to come to “rescue” us whenever we got stuck in the rains? And that explains why they made it a point to remain adequately insured so that their family was not left in the lurch in the face of an unexpected tragedy. It’s also not uncommon for dads insisting that their kids sign up for a life insurance plan as early as possible.
Yes, getting adequately insured is one of the best ways to secure the financial future of the entire family, and you must try to go for a term plan with a sum assured of at least 10 times your annual income. And there’s a reason why dads want us to get insured early, the premiums are much affordable when you start young.
These were just a few invaluable money lessons that we learnt from our dads. Although it’s impossible to give back what all we have received from our “pillars of strength”, we can make them really proud even if we follow their footsteps and improve our lives. Wish all the lovely dads out there, a very Happy Father’s Day!
The writer is CEO, BankBazaar.com