12 Good And Effective Money Management Tips For Dads

Father’s Day, which is celebrated on the third Sunday in June each year, provides a good time for fathers to reflect on the critical role they play in the family. Effective money management skills are are a must have for every dad. The family is a critical unit of society and there is enormous pressure on fathers to provide for their families. 

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Money affects everything; from getting married and starting a family, educating children, starting a business, buying a home, caring for aging parents, losing a loved one, planning for retirement and your estate. 

Here are 12 effective money management tips for dads:

1. Invest in yourself

You are your greatest asset; start with you to get the best return on that investment. Effective money management entails investing in yourself constantly. Be proactive about developing yourself both personally and professionally.

We currently live in a world that is in a constant state of flux. This pandemic is the most profound situation that we may ever go through in our lives. Fathers, How are your coping? You should always be learning, growing and adapting with the times. Be conscious of this and be deliberate about taking your family, career or business to the next level. 

2. Seize opportunities

This unique time presents both opportunities and challenges. Are you sitting on the sidelines waiting for a vaccine for Covid-19, or are you looking at the opportunities that are waiting to be tapped? What problem can you solve now? How can you adapt your products or services to meet the needs of this time? Some of the greatest successes have come from times like this. Will you be one of the success stories?

3. Establish an emergency fund

Your emergency fund should have enough cash to cover at least six to twelve months of living expenses. If you can’t achieve that just yet, start small but meticulously. Each month, as soon as your salary is credited, have a certain amount set aside towards savings. Automating your savings is the most convenient way of achieving this. Start with what you have. There is so much uncertainty, no job or business is secure.

4. Protect your family with insurance

We tend to assume that bad things won’t happen to us! Far too many people ignore the need for insurance until a major mishap or setback occurs. It is then that the impact of inadequate insurance coverage becomes glaring. 

As a father, it is your responsibility to prepare for the worst-case scenario; just in case.  Life insurance is a must for dads, particularly if you are the primary breadwinner. No matter how meticulous you are with your finances, failure to purchase adequate insurance can impair your financial future. This can put you and your loved ones in a desperate situation in an instant.  Motor vehicle, household, health, educational and life insurance are just a few of the various policies that are available to protect you and your family. 

5. Teach your children to save and invest early

Fathers have the responsibility to teach their kids the value of money and how to manage it responsibly. Teach them the difference between wants and needs. Teach them about the dangers of instant gratification and the importance of saving for the future. These early lessons will last them a lifetime. A child who understands how to manage his or her money has a good chance of future financial independence. The gift of financial literacy is one of the greatest gifts you can give your children. 

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6. Create memories

Far too many family holidays end up being just mum and the kids. Don’t miss out on this precious family time of which memories are made. A family that spends quality time together builds powerful timeless bonds. You don’t need to have an expensive holiday in a far away destination. Consider a “staycation”; it is important for them to get to know their country. Explore some of the wonderful landmarks and historic sites. Pour over maps and let them do the research and choose the next destination together. Show them Africa. 

7. Save for your retirement

Setting your family up for future financial independence begins with you and your spouse securing your retirement. If you don’t plan for this, you may become a burden. It is nice if your children take care of your needs because they wish to but not because you are broke. Your future security is important with healthcare insurance in place.

8. Talk about money with your partner

Money woes are a leading cause of fractured relationships and divorce. Money secrets lead to mistrust and resentment putting a huge strain on the relationship. Involve your spouse in the family finances and work as a team to achieve family goals. This way, there is a far greater chance for success both for money matters and your relationship.

9. Save for your children’s education

Funding your children’s education ranks as one of life’s largest expenses. Plan for their education as you plan for their life. When children are still young, you have the benefit of time to select investments. These include educational plans, that offer the prospect of higher returns over the long term. If sound investments are not made early, covering the huge expenses for the secondary and post-secondary years can be challenging. Effective money management takes discipline, consistency and sacrifice. 

10. Do you have an estate plan?

Considering the worst-case scenario is something that no one likes to think about. However, it is only by having a clear estate planning mechanism in place, that you can protect your immediate family. Take steps to ensure that your investments, property and other assets that you have built actually go to those you intended them for.

Too many fathers die intestate leaving trauma and acrimony in their wake. Don’t assume that if you pass on, your spouse and children will automatically become beneficiary to your estate. If you were to die intestate; without leaving a will, strict rules rank your next-of-kin. Your property will be distributed according to law of intestacy, which may vary from state to state.

Review and update your will, trust and other estate planning documents periodically. Ensure that they are in accordance with your current status and intentions. Check and update beneficiary designations periodically, say once a year. At some time or the other, you have probably had to fill out a form or some other documentation where you had to clearly state your next of kin. Is it still appropriate?

Select a guardian; if something happens to both you and your spouse, who should raise your kids? Don’t leave this to the court to decide. Consider where the guardians live including their financial situation. How many children do they have? How are they being raised? Their spouse and so on. Discuss the pros and cons of various options with your partner and come to a decision and include this in your will. Don’t forget to inform the guardians and gain their acceptance of this huge responsibility.

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[Read: Money Matters: Do You Have A Will? ]

11. Have you embraced technology?

The opportunities with the internet and social media are immense. Have you thought about establishing an online presence? The present and future are digital. Are you there?  Can you build an online brand and present your content, your goods and services to the world? Can your team work from anywhere?

12. Give your family your time

In the final analysis of effective money management, all the money in the world cannot replace that precious time for bonding, building and nurturing relationships with your children. If any thing good came out of this global pandemic, it has forced many families together. Be deliberate about being involved in the home online school and precious family moments. You may never have such extended time with your family again; the children will be gone soon. Make your presence count. 

HAPPY FATHERS DAY!

For more finance tips, contact Nimi:

Nimi Akinkugbe has extensive experience in private wealth management.
Website: www.moneymatterswithnimi.com
Twitter: @MMWITHNIMI
Instagram: @MMWITHNIMI
Facebook: MoneyMatterswithNimi

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