How Parenting Alters Your View on Money

In this episode of The Long View, Dr. Preston Cherry, the author of the new book titled Wealth in the Key of Life: Finding Your Financial Harmony and founder/president of Concurrent Wealth Management, explores themes of financial planning and well-being, discussing wealth and the importance of concentrating on what you genuinely value.

Here are some key excerpts from Cherry’s dialogue with Morningstar’s Christine Benz and Amy Arnott.

How Parenthood Alters Your View on Money

Christine Benz: You mentioned pivot points, Preston. One significant pivot point for you personally is the recent arrival of your newborn son with your wife. How has becoming a parent transformed your outlook on life and finances, if it has?

Preston Cherry: It has certainly enhanced my perspective, Christine. I often reflect on my parents, appreciating their sacrifices that enabled me to enjoy my current life. Many people dismiss their parents’ choices, thinking, “I don’t want to live like that,” but those thoughts can overlook the reasons we have the lives we do today, thanks to our parents’ sacrifices.

Both my parents worked hard for 46 years, and while my father’s feet might not be the best-looking, he made sure to take care of himself. My father spent 40 years in blue-collar jobs, enduring wear and tear from steel-toed boots while working at a power plant and an airline, while my mother balanced work and raising us. Their hard work reflects in my life today, allowing me the luxury of good-looking feet.

As a parent now, I carry the lessons learned from being their son. My wife, Eiman, and I aim to provide our son with a sense of self-worth, love, and the realization of valuable resources, much like my parents did for me and my sister. These foundational assets are crucial and contribute to what I refer to as generational wealth, which we want to continue passing down.

We are determined to make wise financial decisions to provide not only for our immediate lifestyle but also to secure our retirement. It’s about an integrated approach—balancing present enjoyment while planning for the future. This involves allocating resources that will help our son develop self-worth and facilitate experiences that will elevate him beyond what we achieved, even exponentially.

The Importance of Early Financial Socialization for Future Success

Amy Arnott: I was intrigued by your story in the book about how your parents provided you with an allowance but required you to maintain a ledger. I think that’s a fantastic strategy for teaching children accountability. Do you believe that keeping a ledger helped foster your sense of financial responsibility as a child?

Cherry: Absolutely. This approach is known as financial socialization, which encompasses the discussions around money within the home. The timing of when children are introduced to money and the context surrounding those lessons can shape their financial understanding. Money conversations in households are becoming more common, particularly among younger generations who often are more financially aware than previous ones. However, this isn’t yet the norm everywhere.

Many of the lessons I’ve learned about money and life have become the foundation for my practices today. The ledger, in particular, instilled a sense of prioritization regarding finances. “Pay yourself” in our household implied taking care of both the present and future selves, a concept that is frequently overlooked. Many personal finance narratives suggest sacrificing current enjoyment for future stability, which can lead to long-term dissatisfaction if not balanced properly.

“Paying yourself first” was about setting aside funds for future needs while simultaneously ensuring you take care of your current well-being. I still carry cash with me today, recognizing the value of being prepared for any situation—be it for a deal or an emergency when digital access might fail.

The teachings from my parents included taking care of basic needs. I vividly remember my first paycheck from my job at a pharmacy. Upon seeing the deductions for taxes, I was introduced to financial responsibilities through a candid conversation with my father. He reinforced the lesson with an example: “We’re no longer covering your toiletries.” Although they could afford it, it was crucial for me to prioritize essential expenses before indulging elsewhere.

Such discussions have had a lasting impact on me and my sister. Additionally, I’ve come to realize that financial circumstances—even life itself—isn’t linear. There’s a distinction between what is portrayed on social media and reality. Life often requires us to adapt to changes, as I experienced when my father faced job losses or my mother chose to be a stay-at-home parent. These moments necessitated open discussions about expectations and instilled a sense of resilience as we navigated through the ebb and flow of life and finances together.