A huge reason why I blog is to teach people about mistakes I made and lessons I learned from them. Though not everyone learns this way, I do well with learning from past mistakes, mine or others. With Father’s Day approaching, I thought I would share some financial mistakes my dad made and what I learned from them.
I don’t have a great relationship with my father and unfortunately most of the life lessons dad taught me were from watching him make mistakes. I grew up watching my dad make multiple financial mistakes but as a child, I was never able to do, or say, anything. I learn from my financial mistakes, my dad, however, did not.
Financial Mistake #1: Never Lend Money to Family
My dad’s heart was always in the right place when it came to lending money to his brother, but unfortunately didn’t have the wallet size to match it. My father would lend money to his brother time and time again, under the pretense that ”this time he will be able to pay me back”.
Money and family don’t always mix. Money is one of the most passionate topics in the world and sometimes is better left out of family. To insure the positive relationships with your family members, don’t get involved with their finances in any way! Do not lend money that you ever expect to see again and especially do not co-sign anything with a family member (outside of spousal relationships).
If you do get involved with family and money, have a contractual agreement drafted up and sign it with a witness. A bank would have a contractual agreement in place but since they are using you as a bank, the same agreement should remain, under agreed-upon terms.
Financial Mistake #2: Don’t Buy Cheap Stuff
My father was notorious for buying cheap stuff. Cheap cars, cheap clothes, cheap furniture…It never lasted. Without a doubt, he spent more money buying and replacing cheap stuff than had he bought quality items in the first place.
I’m always looking for a good deal, and sometimes a cheaper object will do just fine. Sometimes the cheaper object is the same, if not better, than a more expensive brand; but sometimes cheap is just cheap. For things you use often quality is usually worth the money. It is worth saving for a one-time purchase of a quality item than paying multiple times to replace cheap items.
Financial Mistake #3: Educate Yourself
Even at an early age, I picked up on the fact that my father was lost when it came to his financial know-how. His lack of knowledge and subsequent lack of direction in life is what initially started my bad financial mistakes. I borrowed with no knowledge and got deep in debt because of it.
Thought it took a few years, my father’s lack of education and lack of passing of knowledge to me, is what triggered my need for financial education. I had watched my dad make financial mistakes my entire life. As I entered adulthood I knew I didn’t want to be my dad. I wanted my daughter to learn from my financial mistakes because I taught her the mistakes I made as well as the lessons I learned, not from her watching me self destruct financially.
What financial lessons (good or bad) has your dad taught you?
