Like many American families my parents are pretty traditional middle-class or at least that is how I would define them. As I think about the way I grew up I think about the various financial lessons, both dos and don’ts, from both of my parents.
My Parents Financial Background
My parents grew up in rural parts of the Midwest. Both my parents grew up in towns of less than 200 people. My mom grew up on a farm and my dad grew up in small town where my grandfather was the grain elevator manager (a profession that my two uncles and one of my cousins still occupy). My parents did not have a lot growing up, but they never seemed to want for food or things to do.
My parents were married over 40 years ago. They met while my dad went to a technical junior college and my mom was in high school. My dad proceeded to graduate with a machinist “degree” and then spent four years in the Navy. My mom graduated high school and basically did odd jobs while my dad was in the Navy, although they never married while he was in the service, only wrote to each other and dated. It wasn’t until my dad got out of the navy, I became a surprise, and my parents married.
When my dad got out of the Navy he got a job as a machinist/electrician with Jostens (the company that makes all the diplomas and rings). My parents eventually settled into my hometown, rented for the first two years, and bought a house when I was two and my sister was only a couple of months old. They have lived in the same house for the past 40 years.
When I was growing up my dad was the primary breadwinner. He worked his way up through the company and eventually his final position was basically a middle-manager. My mom was a stay at home mom until I was a teenager and then proceeded to get a part-time job working as a busser and then later as a housekeeper for a hotel.
During this time my parents never made a huge amount of money, but it was enough to pay off their house, save some for retirement, and give them an ok middle-class lifestyle.
However, I grew up really not receiving a whole lot of luxuries. My parents didn’t have cable until I actually bought it for them in my late 20s. I never had the latest fashions growing up, I didn’t even own a car until I was 25. I paid for my college education primarily through grants and loans.
When my dad was 59 he lost his job. The company closed down the plant and moved it to another location and never gave him the chance to relocate (not that he would). Instead, they gave him basically two years of severance pay, then he took unemployment, and began working in a cemetery as a groundskeeper for the next five years. Without my dad’s job my parents had to basically pay for my mom’s health insurance out of pocket (which was pretty expensive) and my dad was covered by the VA.
In summary, my parents never lived high on the hog, but they were able to cobble together an ok lifestyle. We never went on huge vacations as a family, never really had the latest fashions or other cool stuff like my other friends had, and I never really traveled until I was 18 and went on a class trip to Mexico.
I give you this background because there are a lot of lessons that became ingrained in me over the years because of my parents.
Some Financial Dos
- Invest your money. I didn’t realize it when I was growing up but my dad did actually save a nice chunk of change for my mom and him when they retired. It certainly isn’t millions of dollars, but with my dad’s small pension, my parents social security, some extra income, and those investments they should be able to be fairly financially content for the rest of their lives.
- Pay off your house. My dad paid off his house a long-time ago. Probably over 15 years ago. As he told me once he never had an interest rate below 8%. So my parents, aside from cheap property taxes, have a very low threshold for household living.
- Become a DIYer. My dad is really handy. He can change the oil the cars, do basic repairs around the house, and is constantly making things in the garage out of wood. I didn’t get that gene. I don’t have any interest, but it does inspire me to learn.
- Be generous. My dad, for all of his faults, is one of the most generous people I know. For example, my dad ever since I was kid plants a huge garden. And I mean huge. We are talking farmer’s market quality not just tomatoes in the back yard. And every year they either consume some of it, but for the most part give it away. My dad does the same thing with the maple syrup he makes every year with a friend. They could sell it for tons of money, but he gives it away. While I often think that he could be a better steward with his money (he has probably given away $100,000 over the years in food, making items, maple syrup, etc) I admire his constant generosity. It is something I try to emulate in my work life. While I don’t give things away I try to give my time and efforts to my colleagues as much as I can.
- Hard work pays off. I think both of my parents are hard workers. They didn’t complain (at least much) and did their jobs. My mom worked for basic minimum wage, primarily for spending money, but she kept doing it even as she got older and had to literally walk 2 miles to her job everyday one way. In Minnesota, in the dead of winter, walking 2 miles is a pain. Now my dad would give her a ride sometimes, but my mom insisted on being independent (I just wish she got her driver’s license). I think that hard work has been passed down. I have never taken a dime from my parents. I always made my own way and have been fairly successful. I want the same for my kids, although I might have a different philosophy.
Some Financial Don’ts
Despite a lot of positives my parents gave me they also gave me somethings not to do.
- Don’t drink and gamble your money away. My parents, although not as much anymore, like to drink and to gamble. I am sure they have spent tens of thousands, if not more, of their money on these activities. I just don’t see the value in drinking that much or gambling. Don’t get me wrong I like a good beer and a glass of wine, but it is rare that I will have more than one per day, if at all. My vice is soda pop.
- Make house repairs. I love my parents dearly, but they need to make some serious renovations to their house, particularly because they are getting older. For example, growing up we didn’t have a shower in the primary bathroom upstairs. Even though my dad has had the house paid off for almost two decades he has never installed a shower. I don’t know why he doesn’t take some home equity and repair the bathroom, rip up the carpets, and redo the basement. He has said he would, but he never has. I have always wanted to do things in our house and over time I believe we will. I am not afraid to do so because I think it will be a good investment.
- Travel More. One of the things I wish my parents would’ve done as we grew up and still to this day is travel more. I have lived on the east coast for almost 15 years and my parents have visited me once and that was 10 years ago when I married my ex-wife. Other than that they visit my brother, who lives in Las Vegas, but that is it. My dad will travel to his home state to hunt or fish, but nothing more. That is not the life I want for myself or my children. I have already been to over 20 countries and hope to hit 50 by the time I leave this earth and visit all 7 continents. Travel is one of my passions. I just think it opens one up to the beautiful diversity that is around us.
- Be Financially Transparent. My dad is really weird. He never wants to talk about money. And I don’t necessarily care about how much he has because I have a pretty good guestimate. What I am worried about is end of life planning. What happens to those dollars for my mom? I mean she doesn’t drive, she doesn’t handle any of the finances, what do we do to help her out? I know that my dad has a will, long-term care insurance (at least I think so), and money in the bank. But when it comes to talking about financial planning as they get older my dad gets really angry when I mention it. It is almost like he thinks I am wanting him to die or something. That is why I have vowed not to be that way with Mrs. ROB. Although I do most of the budgeting, take care of most of the bills, etc, she knows all of the passwords to the accounts, how much money we have in debt (something I am sure she doesn’t want to know), how much are house is worth, how much we have in investments, life insurance, etc. I don’t want to keep financial secrets from her. In fact, I probably go a little overboard.
- Common Financial Goals. My parents never seem to have common financial goals. My dad made most of the money. He paid the bills, invested, and then spent the rest. My parents never talked about buying a house on the lake or traveling or planning what they would do together. I don’t want that. I want us to dream. I want us to be on the same page, even though Mrs. ROB and I have different philosophies on money. That is fine, but I do want us to share in common future goals (e.g. having children, traveling, retirement, etc). And it seems so far that in general we do. I could do a much better job, but like all things it is (and I am) a work in progress.
The Bottom Line: My parents taught me a lot of life lessons financially, some good and some bad. I just hope that I build on the dos and avoid the don’ts.