(Don't) Listen to Your Father about Personal Finance
Dad's advice is great for some things, but not necessarily for your personal finance.
All of us have some old financial advice that our fathers gave to us. While some of it still rings true today, a lot of it has changed with the times. Here are some of the biggest myths of personal finance today and things that you need to do instead.
Relying On Social Security for Retirement
Your parents likely relied on their Social Security payments to pay for their retirement. This was at a time when these payment plans were secure and could guarantee a comfortable life. The country is still struggling to recover from its own debt, so a lot can change in the way of Social Security within the next 20 or 30 years.
The best thing you can do is plan ahead for your retirement and save your own money. Create a budget and decide just how much you want for retirement. You can then determine how much you can save and how long it will take you. The sooner you start, the longer you have!
Get a Degree and Then a Job
One thing parents believed was that a college degree was the only way to get a good job. During their youth this was the case, however it isn't so much the case now. It is possible to get a job at 18 and work your way up the chain. Within four years, you could very likely be at the same level as a recent graduate, and may even have better prospects.
Some people find this route to work for them, and if and when they do need a degree, they go back to school later in life. You can even study while you work, giving you the knowledge and experience at the same time.
Make sure you can afford a house before you follow your dad's advice to buy it.
Buy a House Straight Away
Getting on the housing ladder is still important, but it's not always the best idea to buy as soon as you leave home. You may find renting is better for your current financial situation, while you save up for a bigger down payment. Most lenders ask for at least a 20 percent down payment now, but more will give you a better mortgage and interest rate deal.
You also want to be at a point where you are financially secure. There is a high risk of foreclosure still, due to employment situations still not being perfect. That isn't something you want blackening your credit rating.
You Don't Need a Credit Card
Not having a credit card offers its pros and cons. The important thing is not to use your credit card too much. Having one and using it now and then (and then clearing it right away) is actually really good for building your credit rating. You show that you're a responsible borrower and it will help you get loans and mortgages in the future. Credit cards can also offer some extra protection if you're buying larger or more expensive gifts.
However, never buy something that you can't otherwise afford. There are interest rates applied and you will find items cost more if you just make the minimum payments each month.
Remember your dad's advice comes from the 60s and the 70s. This was a completely different time, and the advice needs to change with that. It doesn't mean you should completely ignore him (he is your dad after all), but definitely think about whether his tips still apply for your personal finances today.
Alexandria Ingham is a freelance writer with experience in technology, personal finance and budgeting.