The Bank of Dad – Closed for Business! (Part 3)
Image sourced by Aniket Narula @avisualls
Welcome Back,
Thank you if you were one of the many Budget and Grow Rich® readers who sent us feedback on this blog post series The Bank of Dad – Closed for Business Part 1 and Part 2. If not, please send us some feedback; this is how we zero in on content for new blog posts that are valuable to you!
In case you happened to miss my grousing about Netflix and how they changed the game, limiting the number of households that can share a Netflix membership, and parents’ decision to contribute to their adult children’s living expenses or save the money for themselves, you can catch up here and here.
More and more, I hear my peers talk about contributing money to their adult children’s living expenses.
And to be fair, I get it.
The cost of living is out of control, especially with the exorbitant cost of a college education; healthcare and rent. Oh and income taxes and well, other taxes.
No wonder younger people have difficulty supporting themselves. Crazy.
A 2023 study – Housing Perspectives – conducted by Daniel McCue of the Joint Center for Housing Studies of Harvard University wrote, “Headship [household formation] rates for most age groups have recovered to rates from a decade ago, and with deteriorating affordability for both renters and homeowners. . . further gains in household formation may be limited.”
Or further delayed or deferred!
Perhaps it’s a different time and world from when I grew up?
You may recall that when I entered Junior High School – that was the 7th grade back then – my Dad gave me my allowance for the entire Fall semester in one shot – Cash on the Barrelhead.
That Harrowing experience led me to figure out how to make a personal budget and budget my money and ultimately master personal budgeting – for better and worse!
You can grab that classic Budget and Grow Rich® blog post here.
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When I was in 8th or 9th grade, my Dad ‘encouraged’ me to land a job as a busboy at a local catering hall and then The Utopia Country Club, a private country club near my house.
The money was hourly pay at minimum wage, which was either $3.35, $3.85 and then as I recall, $4.35 an hour. I can’t recall whether they paid overtime on the hours in excess of 40 per week.
I worked there for a few summers and learned many excellent life lessons, which I use to This day.
That job was a fantastic way to learn the value of a dollar.
It was hard work!
I worked at least 40 hours every week.
Each summer, I earned between $3,700 and $4,500 in total. Good money at the time!
Today, $4,500 is the equivalent of approximately $15,000 to $17,000 – a decent chunk of change.
I earned every penny and am proud of it!
All in all, I learned about hard work, saving money and personal budgeting.
This experience shaped my life.
Somehow, times seem different today. The youngsters at least in my area have extremely hectic schedules, including a very rigorous school day schedule with loads of homework. Plus extracurricular activities. Very little downtime.
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A few years later, when I was in high school and got my driver’s license, I had my eye on a 1978 beautiful, midnight blue Cadillac Seville® for $3,800.
That was more than a summer’s wage after-tax (after taxes).
Given my personal budgeting know-how and my earnings from my summer jobs at the country club, I had accumulated enough money to buy the car.
What’s more, my best friend Paul’s parents bought him a brand new Pontiac Trans Am.
I wanted to keep up with the Joneses or in this case Pauls.
My Dad said, “Well, Mom and I have two cars and on the weekends, we use only one. So you can use the second car for Free. Including gasoline and insurance. On the other hand, if you buy the Cadillac Seville, you have to pay all the costs including the insurance, gasoline and maintenance.”
That was enough for me to take the Free Option. . .
This experience too shaped my life.
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My Dad was very generous, including contributing some money towards my college education.
Although he was tough, extracting his pound of flesh.
But, he taught my brother and me some great life lessons.
My Bank of Dad is different from my Dad’s Bank of Dad and my Bank of Dad.
And probably different from your and your parents’ Bank of Dad and Bank of Mom.
Any way you slice it, human nature hasn’t changed in over 5,000 years!
I don’t know what’s right but it’s best if you decide, given your personal situation, financial position, net worth, income level and living costs.
Certainly food for thought. . .
Not necessarily easy questions to answer or easy decisions to make!
But important decisions and potentially life-changing decisions!
See you next week.
Arthur V.
Disclaimer: OH and Please Remember, we are Not financial advisors, financial planners, attorneys or accountants and are Not providing any specific financial, tax or legal advice here. Be sure to conduct your own due diligence and consult your own professional advisors to get sound professional advice that’s specific to your financial and personal circumstances, risk tolerance, time horizon and investment goals and objectives among other key factors!
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