Home truths about dealing with money from childhoods gone by
From saving for a rainy day, to living within your means, it is often our parents who give us the best advice about finances, writes Louise McBride
Childhood is often the time that we learn valuable lessons about money - or where we get the grounding to manage life's financial challenges. More often than not, it is our parents or grandparents who have taught us our first and most valuable lessons about money.
So with Christmas fast approaching, we've asked some Irish household names and well-known business and financial minds to tell us the best advice they got about money when growing up.
At the age of 11, the TV personality and hotelier Francis Brennan made hundreds of pounds selling Christmas logs (decorated wooden logs sold for use as a centrepiece for a table). "My dad was a grocer and he supplied the then Catholic Boy Scouts of Ireland with sliced pans and so on," says Brennan. "I'd go with my dad to help him deliver the groceries to the scouts headquarters - and I always collected a few wooden logs when visiting. I'd then decorate the logs and sell them to restaurants and pubs at Christmas. So I always had a few bob."
Brennan, who is co-owner of the five-star Park Hotel Kenmare in Kerry, says he learned how to handle money from a young age as a result. His father also taught him to be cautious with the money he earned. "My father told me to always keep a bit for the rainy day," says Brennan. "So I was always cautious for the rainy day. You could be a millionaire one day and broke tomorrow - as has happened to many people in this country. I've never hired private jets. When I visit a city, I always take public transport. Other people have cars waiting to drive off in or taxis to pick them up. I always thought that was extravagant."
He believes his caution with money helped his hotel through the recent recession. "It ensured we always had a bit of money," says Brennan.
Joan Freeman, the Independent senator who was also a candidate in the recent Presidential election, says that it was her upbringing, rather than a specific piece of advice, which influenced her approach to money.
"I came from a family where there were eight children and where we lived in a house with two bedrooms and one box-bedroom," says Freeman. "Money was never terribly important to us. We never felt a lack of it, but we had no awareness of money either. Other things were far more important. That's the environment I came from and the message which I took from that environment was never to give money any power."
Freeman cites a quote from Jonathan Swift, the author of Gulliver's Travels, which states that 'a wise person should have money in their head, but not in their heart'. Freeman is a big believer in this advice. "We've got to survive and we need to earn a living," says Freeman. "But don't make money your goal. We need to see that other things are more important. That's been my ethos all my life."
Former world champion runner and three-times Olympian Derval O'Rourke learned the importance of living within her means from a young age. "The best piece of financial advice I ever got was never to spend what I don't have - and never to borrow money that I couldn't pay back," says O'Rourke. "I learned that from my mum and dad when I was growing up."
O'Rourke says that advice has stood to her over the years. "Probably the best way it has stood to me was when I bought my first house in 2006 at the height of the boom," says O'Rourke. "The bank cleared me for way more money than I had the capacity to pay back. I remember sitting down and working out if I would be able to afford to repay the mortgage - particularly if I lost sponsorship and so on. I ended up borrowing less money from the bank than I had got clearance for - and therefore taking out a loan which I felt I could repay. That was one of the best financial decisions I ever made. What happened then is that the bottom fell out of the [property] market and I lost some sponsors. Because of the forward planning I put in though, I could still manage my mortgage. If I hadn't had such a sensible grounding in money when getting that mortgage, there would have been major repercussions for me."
O'Rourke was only 24 when she bought her first house. "At the time, there were a lot of people borrowing as much as they could get from the banks. I sold that house this year and I never made any money on it - but it hasn't hampered me going forward either." O'Rourke has since built a house in Cork with her husband, sailor Peter O'Leary. The couple have a three-year-old daughter and are expecting their second child this spring. O'Rourke has published a number of health food books since she retired from athletics in 2014. She recently launched the website derval.ie - a one-stop shop for health plans, such as food and fitness plans.
As Financial Services and Pensions ombudsman, Ger Deering investigates complaints made by consumers against financial institutions. Deering, who is from Carlow, says he came from "a humble, rural small farming background".
"If I were to ever comment on people who had money - or who didn't spend their money, my father always said 'don't hold that against them because if they didn't have it, we wouldn't be able to borrow it'," says Deering. This simple view of banking - which essentially meant that if people didn't have money on deposit in the banks, others wouldn't be able to access it. Deering was reminded of his father's view during the recent collapse of the Irish banking system. "If that principle of banking had continued, we might not have suffered the extreme banking collapse which we had in this country," says Deering.
"Another good expression of my dad's was: 'As long as you are struggling a little bit, you'll be okay'. That meant that it's good to challenge yourself - not to be too comfortable but not to push yourself too hard either." Deering says this expression has helped him with money over the years as it taught him not to go extremes with it.
"My parents taught us not to waste resources - and that money in particular is hard-got," says Deering. "They taught us to have respect for money and to be careful with it. In some respects, we got help from our parents starting off. They didn't want us to get into debt too deeply. We learned a certain level of prudence from them."
The Irish actor Owen Roe, who has starred in the hit TV dramas, Vikings and Game of Thrones, grew up in a working-class family in Dublin. "Money was whatever turned up in a brown envelope on the kitchen table every Friday," says Roe. "Disposable income was not an assumed luxury. The only advice from my parents was: 'Save IF you can'. This was good advice which I did heed. In my thirties, during the 1990s, I was fortunate enough to occasionally earn some decent cash and was in a position to save for a house deposit and provide for two wonderful children."
Roe, who turns 60 next year, is busy preparing for his part in the A Night Before Christmas - which will be in Dublin's Pavilion Theatre a few days before Christmas. He feels the financial climate has changed "radically" since the 1990s. "So I find myself repeating the advice to myself - that is, to save IF you can."
Never a borrower nor a lender be
Chef Darina Allen, pictured, is the co-founder of Ballymaloe Cookery School.
“I came from a thrifty era when people held very strongly the phrase ‘never a borrower nor a lender be’ — and when people believed in the importance of living within your means,” says Allen. “I’ve always been terrified of getting into debt, though I do believe that it’s nice to be flexible on the lender side if you can — and to help people out if they need a digout.”
You get what you pay for
Allen’s late parents-in-law, Myrtle and Ivan Allen, opened Ballymaloe House, their home, to the public as a restaurant in the 1960s and later as a hotel. Allen says she learned valuable lessons about money from her mother-in-law. “One of the things I always remember Myrtle saying was that if you really want to get quality, you have to pay for it,” says Allen.
“She’d ask her suppliers and producers what they needed to be paid to produce a certain quality of food for her. People were surprised at this, but I was very struck that people never took advantage of Myrtle — and that they always provided her with good quality. Myrtle always said that it was important that producers and suppliers were paid enough — otherwise, they wouldn’t be doing the job the next year.”
Ballymaloe House is still managed by the Allen family and, though her parents-in-law have died, Allen says she has carried on Myrtle’s philosophy in the business today. “We’ve a network of small farmers and artisan producers,” says Allen.
“If you beat someone down on price, you can’t expect quality — you get what you pay for. I also believe really strongly in paying people on time — and to do to others what you want others to do to you. It means you can have a lovely relationship with your producers — who I feel we are totally dependent on and whom we respect.”
Don’t undersell yourself
Another piece of advice which Allen got from Myrtle was the importance of charging enough in business so that you can do a good job. “A lot of people look around at what their competitors charge before arriving at a price,” says Allen. “They try to beat their competitors on price. But if you do that, you can’t produce the quality you want to produce.”
Promise less and deliver more
Allen says she is also a big believer in businesses delivering the same, or more, as they promise to their customers.
“Marketing material today usually delivers less than what it promises,” she says.
“The photos [in ads] always look better than the reality. So people are conditioned to be disappointed.
“By promising less and delivering more, customers get that lovely element of surprise because they’ve got something better than they expected.”
All of these mottoes have stood to the Ballymaloe business, according to Allen.
“The goodwill generated by operating a business in this way is enormous,” says Allen.
Sunday Indo Business