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4 things your father wants you to know about money and debt

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© Adam Gault / Digital Vision / Thinkstock © Adam Gault / Digital Vision / Thinkstock

By Andrew Housser

Father’s Day is this Sunday, June 18. Seasonal advertisements are promoting the best gifts for Dad, from grilling gadgets to sports tickets to fancy electronics. But according to a recent survey, what fathers most want costs very little. Many say they would like to go out to dinner with their families. Most say they would like to know their families love and appreciate them. 

Fathers also want to share the financial and life experiences they had with their children, to help them set off on the right financial footing. Keeping these four pieces of fatherly advice about money and debt in mind will help you – and your father – know you are on the right financial path.

Watch out for student loans, but don’t ignore their value. Student loans are in the news frequently, and with good reason. This year’s college graduates owe an average $37,000 in student loans. Also in the news: more young men are forgoing college completely. This trend comes, in part, from worries about repaying debt that can reach into six figures. While apprenticeship programs and other paths can be valuable when they match people with their best careers, a bigger investment sometimes delivers a bigger return. In 2015, college graduates earned 56 percent more than people with only a high school diploma. That gap – a difference of more than $500 per week in median earnings – is the largest it has ever been. Over a lifetime of work, a college graduate might earn more than $1 million more than a person who only finished high school. Those extra earnings are enough to repay reasonable student loans, and then some. The lesson from Dad: Take the long view when evaluating whether to borrow, and for what purpose.

Use a credit card, but pay off charges in full and on time. Most people have seen their father use a credit card for many types of purchases. Credit cards are convenient, and necessary for some purchases, such as travel-related ones. If you charge no more than you can pay off in full each month, credit cards also can help you build a credit history that makes it easier to borrow later for things you need, such as a car or home. The lesson from Dad: Using credit cards be convenient, and can help build a credit profile. But be sure to pay them off – in full and on time – so that you do not accrue interest charges or fall into debt problems.

Get organized about money. If you are organized about just one thing, make it your money. If you grew up assured of having a roof over your head and food on the table, odds are good that your parents had some kind of financial system. It may be helpful to ask them about their system as you develop your own. Today, technology makes it easy to track spending and budgets in real-time. Automatic deposit and payment features ease saving and bill-paying. The lesson from Dad: Timeless words of wisdom still apply when it comes to money management: However you do it, know what you bring in and what you spend – and make sure to spend less than you make. 

Build an emergency fund. The Great Recession – one of the most severe in a string of economic downturns – began in 2008. That means every father over the age of 25 has weathered at least one tough economic period. One of the biggest takeaways from a recession is to know that income can change in an instant. The surest way to endure a financial setback is with healthy savings. Conventional wisdom suggests saving enough to cover six to nine months of living expenses. This safety net would tide you over through a few months of joblessness or underemployment, or cover unexpected expenses. The lesson from Dad: Save for a rainy day – because it will rain sometime.

Whether your father is your financial role model or offers more of a cautionary tale, you can learn from how he has managed money. And whether or not you have a family of your own to support, taking a strong part in your financial well-being can pave the way for a more confident future.

Andrew Housser is a co-founder and CEO of Bills.com, a free one-stop online portal where consumers can educate themselves about personal finance issues and compare financial products and services. He also is co-CEO of Freedom Financial Network, LLC providing comprehensive consumer credit advocacy and debt relief services. Housser holds a Master of Business Administration degree from Stanford University and Bachelor of Arts degree from Dartmouth College.
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