How Being a Parent Changes Your Perspective on Money

On this episode of The Long View, Dr. Preston Cherry, the author of a new book called Wealth in the Key of Life: Finding Your Financial Harmony and founder and president of Concurrent Wealth Management, discusses financial planning and well-being, wealth, and how to focus on what you truly value.

Here are a few excerpts from Cherry’s conversation with Morningstar’s Christine Benz and Amy Arnott.

How Being a Parent Changes Your Perspective on Money

Christine Benz: You referenced pivot points, Preston. And one pivot point I think for you personally is that you and your wife recently welcomed a newborn son. Can you talk about how being a parent has changed your perspective on life and money, if it has?

Preston Cherry: I think it’s enhanced it, Christine, because I talk about my parents a lot. And I give them their flowers now because right now, because a lot of people, pooh-pooh on their parents, they are like, “Well, I don’t want to be like my parents. I don’t want to work a nine-to-five. I don’t want to work 40 years for a company. I don’t want to make the same mistakes they did.” But there’s a reason why you’re sitting here, right? And enjoying the life that you enjoy is because they sacrifice. So, I don’t like hearing people say those types of things to their parents.

My dad and my mom both worked, and they have been married 46 years. My dad has not the best-looking feet. And he still gets a pedicure every now and again, but he doesn’t have the best-looking feet. But I do. My feet are beautiful. They’re oiled and all this other stuff. They have good cuticles. But why is that? Well, my dad worked 40 years, blue collar. And he wore boots all the time, steel-toed boots. He worked for the power plant, and he worked for the airlines, too. My mother worked also. She went back and forth between working out in the workforce and being at home raising us. But that hard work that shows up on his feet and it allows me to have good-looking feet.

And so I appreciate that very much. So, I say when it has to deal with our son, my wife, Eiman, and I, is I’ve been someone’s son. I haven’t been somebody’s dad. And I know what it feels like to be a son and what I appreciate in life, and what my folks gave me. They gave my sister and me self-worth, self-value, and love. Those are compoundable assets no one can take away from me. And actually, those assets right there can feed into something called household production. You could be more productive in life. If you have these resources, then you can use your well-being units and also your human-capital units to be more productive in life—produce that income you need to buy assets and so forth. But that came from my parents. And so, how does that carry over? That’s another form of generational wealth. How does that carry over to the next generation?

Well, my wife and I are dead-set on making the decisions, even hopefully making an improvement because we’ve been afforded resources in life. Much like our parents did for us. I’m using that construct to pay it forward and align our dollars in a way that not only helps us live right now—a nice lifestyle because we’re in our vitality years and also fund our retirement for later. It’s and not or. Also, now, how are we going to assign these dollars to him to afford him that self-worth, that self-value, and even more resources because my parents moved us to the good school districts in order to advance ourselves. We were middle class; we weren’t poor, we weren’t rich. But there was a reason for all of that. And so we want to assign our dollars in a way that helps him experience what we experienced and even ten- or twentyfold.

Why Financial Socialization in Early Life Can Set You Up for Financial Success

Amy Arnott: Another story about your parents that I really liked in the book is you talk about how when you were growing up, they gave you an allowance, but you had to keep a ledger book. And I thought that was a great idea to kind of instill a sense of accountability with kids. Do you think that that ledger helped instill a sense of financial responsibility with you early on?

Cherry: Absolutely. Financial socialization is the fancy term for it, but these are money talks in the home. When were you introduced to money, and how does it align with life? I think that’s most important to everybody—I wouldn’t say everybody because money talks are getting more and more common. These young folks are in tune with their finances more than Generation X and the previous generation, but that doesn’t mean it’s still the norm. We have money talks in the home. Yes, you could talk about, say, opening up a Roth and contributing to it. Or set 10% aside for saving so you can pay yourself. How does that apply to life, too? And I think that’s where not only the money talks but the life talks that we had in our household were very beneficial and influenced the way that I’ve practiced money before and now.

It’s carried over. I’m 46 years old, and many of the lessons that I learned either were improved upon or saying, hey, I want to do that differently—as far as the money talks and the practices that we had in the home. And as far as the ledger was concerned—and there’s another story. First, the ledger: It did provide a sense of priority about money, and pay yourself meant two things in our household. It meant pay your current self and your future self, which is an underappreciated concept nowadays, which is a lot of folks pushing back on some of the stigmas and things to say all the time, often-repeated things in personal finance. Which is you have to somehow sacrifice everything in the present in order to fund your future and have this extra sense of delayed gratification. And that can be harmful as well because if you give so much of the present up now, you’re unlikely to commit to a financial plan long term, and then you’re going to have regrets in the future, more than likely.

And “pay yourself first” meant two things in our home, which is, yes, set some money aside immediately for your future self. This is where the ledger came from, as far as the order of priority. Then also put some money in your pocket. Put some money in your pocket. I still carry cash to this day, folks. Yes, I still carry cash money. You never know when you’ll need some cash money. Deals on the table or something like that. Then, whoever has got the cash in their hands is going to get the deal. Or in an emergency, if you lose electricity or something, ATMs are out, I have cash in my hand.

And it was about, my dad and my mom said take some money for yourself. Invest in your well-being. You can buy something material if you like. Do something, read a book, whatever that well-being domain is in life, but make sure it’s for the right now to take care of yourself. Self-care, so that’s your current self and your future self. That’s what that ledger taught. And then another story real quick was taking care of needs, as far as what you need to do as far as your responsibilities with your money. I remember the first time I got a check. I think it was for a pharmacy company or something like that. I think it was Eckerd’s or something like that. But anyway, I worked in a pharmacy. And I brought my first check home.

I think it was like 16 or 17. And I said, “Yo, pops, what’s this FICA? Why they got all these hands in my pockets?” He was like, “Ah, all right, so let’s have a little conversation about the taxman.” And so that was an introduction to that. And then my parents also said, “While we’re on the subject, since this is a lesson on how you can’t do everything willy-nilly with your money. So, while we’re talking about the tax person and paying yourself first—current self and future self.” They said, “You know what, we’re not buying any of your toiletries anymore. for your bathroom.” Because me and my sister shared a bathroom, they said, “We’re not buying any of that for you anymore. Toilet paper, toothpaste, lotion, and all that.”

Now, could they have? Absolutely, I mean, obviously, they had money to buy me the stuff. But the point was that you need to be doing these things, taking care of your priorities first before you go to the mall and do this or that. And so, from the age of, I think, 16 or 17—from my first job, let’s just put it that way—I was responsible for toothpaste and all that type of stuff. And we lived in the old-school house, so one of the choices was you weren’t walking around with bad breath. So, you didn’t have any choice but to go get your toiletries. But those money talks, money experiences have helped me and my sister carry that forward in life. And this one last thing I’ll share about life and money—life and money has ebb and flow.

It’s not a straight line. And life doesn’t work that way. And I think there are too many rosy pictures out in social media and all that. I say there’s real life, and then there’s reel life. Reel is r-e-e-l, and then there’s real life, r-e-a-l. And you have to be able to roll and adapt. And there were times when my dad lost his job or my mom decided to stay home for work. We had to make some adjustments, and the money was tight. And so we had talks about that. How do you feel about that? What are going to be the expectations for the next six or seven months? How do you inspire hope that things are going to get better? What that also showed about life and money is life and money is ebb and flow. And you have to be able to roll and adapt and make some adjustments as well. So, all of those were money talks in the home for us.