Active Stocks
Tue Jul 09 2024 15:58:00
  1. Tata Steel share price
  2. 171.80 -0.29%
  1. ITC share price
  2. 452.75 2.09%
  1. State Bank Of India share price
  2. 860.95 0.55%
  1. NTPC share price
  2. 377.00 -0.15%
  1. Wipro share price
  2. 540.80 -0.08%
Business News/ Money / Personal Finance/  Father’s Day 2023: 5 essential financial lessons that a dad imparts to his kids
BackBack

Father’s Day 2023: 5 essential financial lessons that a dad imparts to his kids

There is more to a father’s side than only cheering his son on the football field. A father is one who will give you your first penny to spend while also teaching you how to save and invest it for the future.

A father teaching his life lessons to his son during his formative years is the purest form of love that one can see in families. Premium
A father teaching his life lessons to his son during his formative years is the purest form of love that one can see in families.

You cannot undermine the importance of a father in a child’s life, especially, in his early formative years of development. A father teaches his child not only to walk but also to walk with his head held high ahead of others. Your father will tell you the unsaid rules of social well-being while training you in the basic rules of social competence. In a way, he will nurture you to be the man that he wanted to be.

As you celebrate Father’s Day on June 18 this year, try recalling all those important financial lessons that you may have knowingly or unknowingly received from your father during your childhood years.

Attaching value to money

There are always tricks and treats for every learning. So, when your father teaches you about money, he is treating you to a world that may trick you of your money if you are not careful. You see your father toil day in and day out to pay for your needs. This is when you learn the value of money. That money does not grow on trees and must be earned is the first lesson that your father imparts to you quite early in life. Most importantly, your father does not overwhelm you with such an important personal finance lesson. You emulate what he does and that is how you learn how to value money on the table. You know for what it is worth as bills get paid and monthly rations are ordered.

Money management

You cannot value money if you do not budget it well enough. A father effectively explains the need to manage money effectively. A strong foundation is laid at each step as the child discerns how “needs" are different from “wants". A father tells his kids how to budget money as it comes by saving what is needed utmost and then deciding how much to invest before moving to spend the remaining amount.

The first step that every father teaches his kids is the importance of opening three bank accounts for savings, investments, and expenses. The monthly income is allocated to each of the three different accounts to ensure that there is no overlapping. That the money in the savings account continued to be saved and treated like an emergency corpus, the part allocated to investments does not get spent unnecessarily and is invested while the remaining money is spent on essentials and recreation.

A father teaches you the value of “restraint". A twitch in his eye will tell you when not to spend before you earn or not to stretch your spending beyond your savings. The lines on his forehead mirror the stress due to debt. And that is when a child learns never to incur debt unless absolutely necessary. That assets must exceed the debt, by all means, is the most important financial lesson that every father imparts to his ward(s).

Deciding on a financial goal

Remember when your father encourages you to kick your first goal against your opponent or the high that you get when you score points on a winning rally in a soccer match? Life is no “football", and yet there are goals that must be set, tried, and scored in life.

Every father instils a sense of direction and purpose in his children. He tells them how it is futile to earn, save and invest without a financial goal in mind, and most importantly, not all goals are to be met in the near future. He tells them how their children must decide their financial goals based on how they view them. So, it can be a short-term financial goal, for example, to buy a car in the next two years or plan their higher education on foreign soil in the coming four to five years, or get betrothed to a loved one soon.

Then, come the long-term financial goals like planning to buy a dream house after 15-20 years, setting up a retirement corpus, or planning a global trip after 10 years. A father tells his kids how and where to set up investments that help them earn within the stipulated period, thus, lending them a basic understanding of various investment options.

Working for yourself

Remind the Covid-19 pandemic when so many people lost their jobs? The temporary loss of their jobs garnered the will of many to start their lives afresh. Many employed couples turned to entrepreneurship. A father told his son, “You are now the man of this house. Look after your family till I am able to turn things around for the better". This comment was enough for children to realize how a sudden downturn is enough to shift and redistribute responsibilities among family members. Every child mirrored the perseverance, creativity, and problem-solving skills of his father. Some children learned to slog like their fathers while others took the untread path to entrepreneurship.

The decision to start something new fuelled the entrepreneurial mindset in many children yearning to start and manage a business to earn some money. Many resonated with the words of the famous poem “The Road Not Taken" by Robert Frost as they chose never to succumb to the 9-5 pm daily grind that offers nothing beyond a monthly income and a meagre yearly appraisal.

Delayed gratification

The stern gaze of a father explains to a child why he must not yearn for things that cannot be paid for. A delayed purchase is not a purchase denied, which is what a father tells his kids as he explains to them the importance of delayed gratification.

How many times have we seen fathers telling their wards, “The world is for real! We are not living in a La-La world. You cannot ask for things that we cannot pay for."? Children learn to resist the inclination to spend money impulsively on short-term desires and instead prioritize long-term ambitions. Fathers encourage their children to pause and evaluate the long-term ramifications of their purchasing decisions before making impulsive purchases. A father instils in his children the value of saving for significant goals, such as a large purchase or future financial security, rather than succumbing to instant gratification.

A father acts as a balancing figure in your life. It’s your father who will give you the first lessons on earnings versus spending, savings, and investments. It is your father who will tell you how you can go on a guilt-free shopping spree provided you can pay for it and not land your family in debt trouble. It is your father who will first tell you how to look at money for its value.

The most valuable lesson that every father gives to his child is “Never let your emotions run amok when it comes to money. You will see more money in your life only when you value it ardently".

 

learning-lessons-widget
Warren Buffett says that investors should assess company's competitive advantage before investing into it.
View Full Image
Warren Buffett says that investors should assess company's competitive advantage before investing into it.

3.6 Crore Indians visited in a single day choosing us as India's undisputed platform for General Election Results. Explore the latest updates here!

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Published: 18 Jun 2023, 11:09 AM IST
Next Story footLogo
Recommended For You