Yesterday was Father’s Day. It is a celebration honoring fathers and celebrating fatherhood, and their influence in society. It is also a good time for fathers to consider the critical role that they play in the family, to take stock and to carefully consider their responsibilities. One such responsibility is financial, and it is important to take important financial steps to secure the family.
What is your vision for your family?
Do you have clearly defined family goals? Don’t keep them to yourself; involve everyone; get their input and buy-in as it makes it easier when they are all committed. Family goals include educating children, home ownership, the family business etc. Draw up a family budget with your spouse. Sticking to the budget will require teamwork, encouragement and tracking milestones from time to time; celebrate milestones to keep everyone committed to the big picture. Your money personality will show through; children will do what you do and not what you say. Your actions will speak so much louder than your words, so do be conscious of this at all times to be a deserving role model.
Have money conversations with your spouse
Money woes are a leading cause of fractured relationships that can lead to divorce. Keeping financial problems to yourself only makes things worse and damages the fabric and stability of your relationship. Sharing the burden of financial worries eases it. When the dynamics of a family evolve, spouses often take on different aspects of domestic responsibility, from managing utility bills to the bigger items including school fees and rent. If one spouse is completely removed from any understanding of financial decision-making, or an appreciation for long-term goals including retirement, things can begin to fester which is unhealthy.
If you have a lot of money and you hide it from your spouse, leaving her completely in the dark, this breeds mistrust and puts a strain on your relationship. As far as possible, be transparent about your financial choices. In an ideal situation, in a trusting relationship, so much more will be achieved where family financial management is addressed as a team.
Can your family afford to lose you?
As morbid as it sounds, if you were to die, could your family or dependents, organize the family finances, service outstanding debt, meet family goals, and maintain their current standard of living? Or would they face extreme hardship in the event of the death of their primary breadwinner with the children’s education in jeopardy?
Don’t ignore insurance
We tend to assume that bad things won’t happen to us and 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. No matter how meticulous you are with your finances, failure to purchase adequate insurance can impair your financial future and put you and your loved ones in a desperate situation in an instant. If you are the primary breadwinner, a life insurance is very important; the main objective is to replace income that would be lost should the policyholder be incapacitated or die.
Who is your “Next of Kin?”
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. In Western societies, it is usual for a man to name his spouse as his next of kin. In our society, it is quite common for his brother to be named as next of kin. This puts his immediate family, that is, his wife and children in a precarious situation. Ideally, the mother of your children should be the obvious choice.
Do you have a will?
Many people assume that if they pass on, their spouse will automatically become beneficiary to their estate. If you were to die intestate, that is, without leaving a will, your property will not simply pass to your spouse; strict rules rank your next of kin, and your property will be distributed according to laws of intestacy, which varies from state to state.
It is only by having a clear estate plan in place, that you can protect your immediate family, including your wife and children, and ensure that your investments, property and other assets do not go into the wrong hands in the event of your untimely passing. Review and update your will, trust and other estate planning documents periodically, to ensure that they are in accordance with your current financial status and intentions.
Don’t neglect the boy child
There is a social phenomenon where the boy child is being neglected as we focus so much of our attention on the importance of empowering our girls; this has far reaching consequences. A boy learns so much about what it means to be a responsible, hard working, focused man from his father; this means that the time that fathers and sons spend together is as critical, as it is precious.
Many fathers do not make time for their children. Give your family the gift of your time. In the final analysis, it is not all about money; money cannot replace that precious time for bonding, building and nurturing relationships with your family, the most important unit of society.
Nimi Akinkugbe has extensive experience in private wealth management. She seeks to empower people regarding their finances and offers frank, practical insights to create a greater awareness and understanding of personal finance.
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