Your Dad’s Guide to Financial Savviness: Timeless Wisdom

Your Dad’s Guide to Financial Savviness: Timeless Wisdom 

Successful money management is the process of handling your finances in such a way that it allows you to use your money to achieve your goals and to get the best return. Good money managers are in control of their spending and develop habits that help them avoid debt and financial strain.

In the spirit of Father’s Day, Prevail Bank collected some of the money managing habits and words of advice that have been passed down throughout the ages. They include (not in any particular order):

Short and sweet Dadisms

• It’s never too early or too late to start saving or investing. Start today!
• Fix it yourself.  You can probably find a video on YouTube.
• Just because you came across a deal (or a sale) doesn’t mean you should buy it.  Think about how much money you’d save if you didn’t buy it at all.
• Save energy- set thermostats on schedules so it’s either running on low or not running at all when you aren’t home. Make a habit of shutting lights off when leaving the house and not leaving lights on that aren’t necessary while home.
• Avoid check cashing companies and other quick cash options. They add up over time and become very expensive. (These companies are very quick to report you to the bureaus if you miss a payment too. This hurts your credit score significantly.)
• If you don’t have the cash for it, you don’t need it.  The two exceptions would be buying a home and purchasing a car.
• If you want something, save for it versus putting it on a credit card. If you cannot save for it, you probably can’t afford the debt obligation either. 
• Read the fine print.  An ad may say:  Buy 4 for $20; but on many occasions, you don’t HAVE to buy four to get the discounted price.
• Work with and use the knowledge of a human resources professional, financial advisors, insurance agents, estate planners, and an attorney that you trust. Always surround yourself with people who know these areas well.
• A credit card is a great way to earn miles or cash back on your purchases, but if you can’t pay off the balance at the end of every month – don’t use it. Interest rates are terrible.
• Review your bank statements regularly for discrepancies and fraud.

Budgeting Dad’s way

• Saving money is easy.  Spend less than you make; save the rest.  
• Pay yourself first. Put away / save 5% of whatever you earn.
• Need to trim the budget? Remove your microtransactions (gaming currency); watch the ‘free with ads’ streaming services – drop those that cost money; reduce your app subscriptions. 
• Bring your own breakfast and lunch from home. Stopping at gas stations and fast-food places will eat up your finances. (Pun intended.) 
• Budget your daily spending by giving yourself a set amount of cash each week.
• Have bills set up on autopay to avoid late payments.
• Don’t spend more than you have.
• Small changes add up.

Investing according to Dad

• Buy and hold onto land, because God isn’t making any more of it.
• Avoid quick cash loan places like the plague. Do not, under any circumstances, borrow money from these places. The interest rates on these loans are outrageously high. People that frequently borrow from these places usually end up in a “cycle” that they cannot financially get out of and end up having to borrow regularly because of it.
• Invest in assets that earn money, and not expenses that depreciate. Some income-producing assets include real estate, rental properties, certificates of deposits (CDs), stocks, and bonds. Other assets that could help build wealth include creating your own product, business ownership, education, health, retirement accounts, job skills.
• Use the power of compounding interest to your advantage.  Starting a 401K retirement plan early is one example. Tons of examples online.
• Have a good tax accountant, someone who will limit your tax liability and take advantage of any tax code changes.
• Buy in bulk for items that have a long useful life. 
• Take full advantage of any company retirement plan match. Meaning, if the company you are working for is willing to match 100% of the first 4% of what you contribute per pay period, then 4% should be the minimum that you invest. If you can afford to contribute more, do so.  
• Review total cost of ownership when making decisions: Useful life, warranty,  cost to run, reliability.
• Stay diversified.
• Make sure you have a savings account that has enough money in it to cover all of your expenses for 6 months.  --- If you don’t, consider short-term disability insurance, long-term disability insurance, and life insurance.

Are there others that you can think of to add to the list?