Parental Advice

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graphicgeek
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Parental Advice

Postby graphicgeek » Tue Jul 10, 2007 1:03 pm

People often discuss whether their father or mother helped their view of money or hurt it. So I thought I would ask everyone what their parents most memorable piece of advice was.

Mine came from my father when I was just old enough to understand money and often repeated to me after that.

He always told me that he planned his expenses so that if he lost his job tomorrow he would be able to make all his payments on unemployment. And that this obviously would keep him from hurting the family financially until he could get a new job.

Since I am now married, I have altered his advice to make sure that my wife and I could live on our lowest income if the other party were to lose their job. We also have an emergency fund. But by not taking on more debt than we could afford on one income, the person looking for a new job wouldn't have to feel like they needed to settle for one that would make them unhappy.

What about you guys?

consultantjournal
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Postby consultantjournal » Tue Jul 10, 2007 2:27 pm

I got the advice to live off the lower income. Unfortunately, no one else in the local real estate got this market. As a result, we bought a home that now has a $500k gap between it and the entry-level houses we could have bought. I'm not sure we'll ever catch up.
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Postby Baker » Tue Jul 10, 2007 6:42 pm

My father spent a lot of my life in between jobs. I always remember the mood in the house on nights when he would get laid off followed by cut backs in spending. I followed the advice your father gave you. If I were to lose my job tomorrow we could easily make cuts to keep all our bills paid and not even hit savings.

My mother always told me my father was stupid and if you just keep your mouth shu at work you won't have that problem ;)

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Postby consultantjournal » Tue Jul 10, 2007 7:54 pm

Well, the problem is that our decision to live below our means will entail a $4,000 a month mortgage when we move to a house. :( So we would have been better to live off the higher income (and even ignore the lower one), rather than to skimp and end up in a real estate nightmare.
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plonkee
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Postby plonkee » Wed Jul 11, 2007 1:15 am

Always pay your credit card off in full.

I have no idea why this advice from my mother has become ingrained and not my siblings though :roll:
In mathematics you don't understand things. You just get used to them. John von Neumann

uk personal finance and religion and atheist

graphicgeek
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Postby graphicgeek » Wed Jul 11, 2007 5:49 am

consultantjournal Wow a $4,000 a month mortgage! Luckily the area of Central New York I live hasn't become too overpriced for our incomes. You can get a nice 3br 2 bath for 140,000. And a mansion around here goes for 400,000-500,000 thats only a $2,600 mortgage. When did you buy your house? I know nothing about the Canadian housing market. Are you going through a similar "bubble" as the U.S.?

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Postby consultantjournal » Wed Jul 11, 2007 8:52 am

This is the cheapest home in a good neighbourhood that isn't on a major road/hwy and isn't below the planes to the airport: Link
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graphicgeek
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Postby graphicgeek » Wed Jul 11, 2007 9:01 am

Even with the exchange thats 911,500 in U.S. dollars! That is just mind boggling to me. You would have to go into NYC to get those kind of prices around here.

consultantjournal
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Postby consultantjournal » Wed Jul 11, 2007 2:47 pm

Did I mention salaries are lower here?
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steev
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Postby steev » Thu Jul 12, 2007 7:15 am

My parents never really talked to me explicitly about money...yet somehow I remember (I was really young at the time) the day they cut up their credit cards. As I got older, bits of their financial history fit together in my head, and so while they haven't discussed it with me, I understand what they did and the things that hurt them...so I won't make the same mistakes.

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Postby lostmind » Wed Aug 01, 2007 11:14 pm

ConsultantJournal...

That's why I had to move out of Vancouver. It's NUT'S and was even 4-5 years ago... I bought a place out in Port Moody and love it. I've friends out in Burnaby who have slightly more expensive home (but smaller and older then mine) and a shorter commute to work... but I really enjoy my home out here. Not that it's a steal, but for about $750k you could be living in a 1-3 yr old parklane home in port moody... sounds like that's only $250k above what your place is worth now?

Best of luck though!

On topic - my parents both never talked about money. They divorced when I was young and everyone parental unit I've had has serious problems with money. Luckily, I've managed to overcome that so far!

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Postby 144mph » Thu Aug 02, 2007 3:57 am

I have a memory from when I was around 6 years old and I wanted to buy some Transformer toy with some money I had from gifts or something like that. My mother made it clear that I could buy what I wanted with my money, but she made very sure that I understood just how expensive that toy was. When I finally got it, it was the first time I experienced buyer's remorse.

I also remember at a very early age my parents expressing their deep seated dislike of credit cards. To this day, they still pay for everything with either personal checks or debit cards. Money wasn't abundant in the household and so they still had fights about checkbook balances (recording errors, overspending). The fights were frequent despite the fact that my parents never actively discussed money as a family topic, only when fighting.

They always stressed living below one's means as a lifestyle. I remember absolutely hating the fact that we drove old crappy cars and shopped for clothes at the thrift stores in conjunction with living in a less than impressive home. I felt poor and I was determined not to grow up to be poor and have the same conditions throughout life. It did not help that I attended a private school (my parents spent quite a bit to ensure I had a good education) and all my school friends had amazing homes and possessions. In hindsight, it was an invaluable lesson about what is really important. We always had food on the table, clothes on our backs and a warm place to sleep even if the utilities may have been shut off in extreme circumstances.

consultantjournal
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Postby consultantjournal » Thu Aug 02, 2007 12:36 pm

lostmind wrote:That's why I had to move out of Vancouver. It's NUT'S and was even 4-5 years ago... I bought a place out in Port Moody and love it. I've friends out in Burnaby who have slightly more expensive home (but smaller and older then mine) and a shorter commute to work... but I really enjoy my home out here. Not that it's a steal, but for about $750k you could be living in a 1-3 yr old parklane home in port moody... sounds like that's only $250k above what your place is worth now?


If we did that, we'd need two cars. Work in the computer sector usually means your job is not near a West Coast Express station. Five years of car payments would be $710 a month at 2% financing. I'd estimate that fuel would cost somewhere between $500 and $600 a month. Then there's maintenance. We don't have kids in child care yet, but, when we do, we'd have to pay extra for the length of time we'd be away. So I'm figuring we'd be spending $1500 or more a month just to live in suburbia. And I'd imagine we'd end up spending a lot on conveniences to make up for the lack of time we'd experience. It's not worth it to us to have 2 hours a day less with our family. And we believe in green living, which would be very difficult if we had to drive everywhere. If we stay in the city, there's great transit and everything we could want is within walking distance. And we could rent out the basement, as friends of ours are doing and planning to do, so it wouldn't cost much more than it does now.

Don't get me wrong. Port Moody is a lovely place.
Andrea Coutu
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Postby sdkramer » Thu Aug 02, 2007 4:27 pm

I my parents divorced when I was relatively young. I remember spending the year with my mom and the summers with my dad. They were a study in contrasts. My mom, a single mom working very hard, sometimes 16 hour days and part-time jobs to raise two boys on her own. My father wasn't much of a help with child support at the time for reasons that will become clear later. So mom lived on a tight budget, for a little while we had to live with relatives, a few years we rented, for a few more we lived in a trailer that I think she was embarrased by, but that's what she had to do to get by. Eventually she'd gotten comfortable, bought a home, and began to renovate it to build value. Mom was never rich, but by the time I graduated from college she was comfortable and I'm not worried about her any more.

Then there's Dad. Dad probably always made more than mom, but it was erratic. For a while he worked in sales, for a while he worked at a radio station, for a while he fancied himself a farmer, he'd always try something new, and if the money was irregular the spending was constant. Constantly high. I remember Dad's car, Dad's condo, Dad's exotic pets. You name it he's probably bought it, and unfortunately with money he probably didn't have. I remember his bankruptcy. I remember times he had a roommate who helped pay bills, and I remember him digging through change jars to give me a couple bucks for a snack at the airport.

I love them both, but one taught me how to keep my money, and the other showed me what happened if you let things get out of control. It was painful to watch both of them, but highly instructive. Nothing they could have ever told me would have made the impression that their lives did.

So here I am, a man who makes more money than either (if not both) of them and uses coupons every time he goes to the market, picks up pennies he finds on the ground, haggles over prices, shops at goodwill, and otherwise behaves like a cheapskate.

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Postby SJean » Thu Aug 02, 2007 4:50 pm

My dad: Never buy a brand new car. Make sure you contribute to your 401k if there is a match, otherw. ise you are throwing away free money. Don't be afraid of student loans--it is the best money you will ever borrow.

My mom more led by example--she hardly ever "goes shopping", she pays attention to the bills, etc. She let me live at home rent free a semester or two.

We didn't discuss money a lot though. I went to a private high school, but we were definitely not rich. We drove older cars and didn't have as "nice" of things as most of my classmates, but my parents felt it was worth it.

Ironically, I consider my dad a pretty poor money manager, even though he has some sensible advice....


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