Thursday, December 03, 2009

Becoming My Parents

The older I get, the more I realize I am my parents' child when it comes to some financial habits. Here are a few that I've noticed:

  • Buying gas. In the days of 28 cent gas, my dad used to search out the lowest priced gas station and save 1 or 2 cents. On a percentage basis, he was saving 3.5 to 7%. While I won't go out of my way, I tend to also look for the lowest price gas among the stations in our area. The difference ranges from 5 to 10 cents, with the percentage being about 2-4%. Usually, one of to gas stations has the lowest price in our area.

  • Investing. My dad liked higher risk/higher return investments and my mom preferred certain returns. I like both types of investing. Our savings are split between higher risk stocks and lower risk CDs/bonds.

  • Living frugally. My parents were very frugal, since they grew up during the Great Depression. When I was a child, my parents focused purchases on basic necessities (e.g. basic food, clothing, home). They rarely ate out, took occasional, modest vacations, drove their cars over 10 years, and paid for major expenses with cash that was saved. While we eat out and take vacations more often, I still drive cars over 10 years and pay for major expenses with cash.

  • Filing taxes. My dad always did his own tax return, even into his seventies. He enjoyed identifying and taking advantage of all the tax breaks, especially those for investing in rental real estate. He routinely filed for an extension, resulting in an October filing of his previous year's income tax return.
  • It's surprising how many financial habits I learned from being around my parents. They never formally taught me these habits, and yet I'm doing them much like my parents did. As a result, I'm sure our daughter is also learning her future financial habits from us :-)

    For more on Crossing Generations, check back every Thursday for a new segment.

    This is not financial advice. Please consult a professional advisor.

    Copyright © 2009 Achievement Catalyst, LLC

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