7 terrific things my dad taught me about money

Man and two kids on a beach

My dad has taught me so many things about money that I could never fit them into a single article. His good examples could fill a book.

He always treated me like I was smart and capable, even as a young kid, so I grew into a smart and capable adult. Kids shouldn’t have to worry about money, but that doesn’t mean they shouldn’t be educated about it.

After all, the best time to learn about personal finance is before you have to.

In honor of Father’s Day 2012, here are seven of my favorite financial lessons I learned from my dad.

Lesson 1. A good career is important, but work shouldn’t consume your life.

I’m sure my dad could have chosen a more demanding work schedule if he’d wanted to, since almost anyone can be tempted to work overtime to make more money or even just to impress the boss. Instead, my dad went to work early and worked hard all day so he could come home at roughly the same time every evening. His dedication to his career and loyalty to his employers allowed him to support his family financially, but at the same time, he balanced his time between his job and spending quality time with us. I’m sure there were lots of evenings when he was exhausted, but he was always around to help with homework, play outside and attend my swim meets.

Lesson 2. Women can earn and manage their own money.

This wasn’t a lesson my dad taught me in an intentional, preachy way. He simply never gave me the impression that I should expect to rely on a future husband to earn my income or to manage my finances for me. As a result, I never had any misguided ideas that investing was for men or that women couldn’t handle their own money.

Lesson 3. Your house is a place to live, not an investment.

You shouldn’t assume that your house will appreciate in value. Even if it does, that appreciation is not likely to help you move up the so-called property ladder unless you move to a completely different area with significantly lower home prices. What’s more, the value of your home might stay flat or even decline over the long run. If you stay put and pay off your mortgage quickly, however, you can almost guarantee yourself an affordable long-term home.

Lesson 4. Kids are never too young to start learning about money, and you don’t need to dumb it down.

Before I was old enough to fully understand what a mortgage was, my dad explained that you’re mostly paying interest at the beginning. I might not have known what he was talking about then, but I filed this and other tidbits away in the back of my mind for future use. When these financial concepts resurfaced in my adult life, it helped that I wasn’t hearing about them for the first time.

Lesson 5. You shouldn’t buy things for which you don’t have the money.

I learned not to carry a credit card balance long before I had my first credit card. My dad taught me that the only thing you should borrow money for is a house, and even then, you should only borrow the money for 15 years. Otherwise, spending money you don’t actually have in the bank -- even money you think you’re going to get next Friday -- is never a good idea. My dad also taught me that whether you can afford something or not shouldn’t be the deciding factor in whether you buy it. Do you really need it? Is it a good value? Only after a purchase meets both of those tests does it matter whether you can afford it.

Lesson 6. You’re perfectly capable of preparing your own tax return.

I was 16 when my dad first made me sit down at my desk to prepare my taxes. My dad told me that a lot of people were intimidated by tax forms, but if I just took the time to read the instructions, I would eventually figure it out. He was right. Although I use tax software to save time, I could do my return by hand if I had to, even though it’s now dozens of pages long.

Lesson 7. You can get through a rainy day, or even a few rainy years, if you’re prepared.

Long before I was out on my own, my dad taught me the importance of setting money aside in case I became unemployed or had a large, unexpected expense. My husband and I have had the good fortune to be steadily employed from the time we were teenagers, but we know how we’ll get by if that ever changes. And while we’ve had some major expenses pop up, they’ve never caused a crisis because we’ve been able to write a check to cover them.