Father’s Day Financial Advice from Quicken
Parents are our first source of knowledge. About everything. They know how to cook dinner. And how to tie shoes. They know how to work buttons, and how to put that jacket on so it doesn’t end up backwards and inside out.
As we grow up, the things we need to learn get more complicated. Especially when it comes to financial advice. And not every dad is a professional financial planner.
So, this year, for Father’s Day, we asked our Quicken members to share some of the early advice and family traditions they grew up with that helped shape their financial future.
The best financial advice from our expert Quicken “Dads”
1. Keep your finances up to date
“While the spending discipline is key, the first step is in knowing where the money is going.” —gleasonjim, Quicken Member
The first and most important thing you can do to improve your financial position is to start by understanding it. Gather all your accounts together—banking, credit cards, loans, and investments—so you can see them all in one place. You can do this manually, or you can use a financial app like Quicken or Simplifi to save time.
2. Live by a budget
“Develop and follow annual, monthly and weekly budgets that take into account debt reduction, retirement savings, emergency expense savings and not spending more than your income. Great advice from my dad that has served me well my entire life.” —Boatnmaniac, Quicken Member
Understanding exactly how much you have to spend each month is critical to managing your finances and saving for the future. Design your budget to pay down high-interest debt as quickly as possible. Then, start contributing to your long-term savings.
3. Plan for major life events
“The wanting of something is always at the cost of something else. You can have anything but not everything.” —Mattioli, Quicken Member
Whether you’re planning to buy a home, get married, have children, or start a business, it’s never too early to plan ahead. Create a savings goal and a plan to get there with monthly contributions. Then, set each contribution aside as soon as you get your paycheck.
4. Develop shared goals as a family
“We sit down each December to talk about what we want to do as a family in the next year (and budget for it)” —perroa1, Quicken Member
It isn’t always easy, but families that communicate openly about their financial position tend to do better at sticking to budgets. Financial communication also teaches young people to think about budgets, making choices within the structure of that financial understanding.
5. Prepare for the unexpected
“Any money that I made as a teen (like babysitting or working after school) 1/2 went into a saving account in my name. By the time I graduated I had several thousand dollars saved. We had our children do this and they were grateful in their senior year to have the extra money.” — tworlock, Quicken Member
If there’s one thing 2020 has reminded us, it’s that we all need to prepare for the unexpected. Build yourself a rainy-day fund and save it for emergencies.
6. Minimize credit card debt
“Pay as you go. Credit cards only for true emergencies.” —mlfinch, Quicken Member
The more debt you rack up, the more of your paycheck you have to spend every month just to maintain that debt—money you could be saving for the future.
That’s not to say you can always avoid it. Sometimes, life throws you a curveball that you’ll need your credit to handle. But that’s all the more reason not to use credit cards or take out loans unless they’re absolutely necessary.
Save that credit rating for a rainy day and build it up over time. It’s an asset. Use it wisely.
7. Build your credit rating
“Maintain excellent credit scores by staying on top of bills due.” —golfluvr, Quicken Member
Keeping your credit card debt low and paying your bills on time will go a long way toward improving your credit rating.
Also, don’t co-sign for any loans without thinking through the effect on your own credit. Those loans get charged against your credit rating even if the person you’re helping makes every single payment. If you end up needing your own credit later, that can cost you in the form of a higher interest rate or even a denial.
8. Borrow wisely: understand any loans you take out
“Save first. Spend second. If it’s not worth saving for, then it’s not worth having.” —Bill T, Quicken Member
When you do have to take out a loan, be sure to understand its terms. Know what your payments will be, how much interest you’ll pay over time, and how much money you can save by paying that loan down early.
Most importantly, know what the interest rate is. Keep track of the interest rates across your loans so you can pay down your most expensive debt first, and pay your loans down as aggressively as you can. Not only will you get out of debt sooner, you’ll save yourself a lot of money in the process.
9. It’s never too early to plan for retirement
“My Father taught me at a young age about the importance of saving your money. He opened a savings account for me at a very young age, and he would show me the savings account ‘passbook’ to illustrate the compounding of interest over time!” —JAMESBLS, Quicken Member
Even if you don’t have the kind of career that sets up a 401(k) for you, you can still create a solid plan for retirement. If you’re fortunate enough to have employer contribution benefits, make sure you’re maxing out their matching contribution every month.
10. Develop your financial literacy
“My family was poor, but my father knew the value of an education. I was the first child, and he started saving money for my college education before I was born. The saving habit has stayed with me. I was a lucky kid!” —Joyce, Quicken Member
Lifelong learning is a habit that will help you make smart decisions, especially when it comes to your finances. Read everything you can about finances and develop your own financial literacy.
Make good choices
The best financial advice shouldn’t feel like a burden. It’s not about pinching pennies until your fingers bleed. It’s about making sure you have the money you want for the things you really care about, so you can stay in control and enjoy your life along the way.
And that’s everything a dad could ask for.