Father’s Day is an annual celebration that honours fathers and celebrates fatherhood, paternal bonds, and the critical influence of fathers in society. It is also a good time for fathers to consider the critical role they play in the family, take stock and carefully consider their responsibilities by implementing important financial steps to secure their families. Here are some financial tips for fathers:
Money issues are a leading cause of friction in relationships and marriages. Keeping financial problems to yourself makes things worse and damages the fabric and stability of your relationship. Discuss any worries with your spouse as sharing the burden eases it. And if you have loads of money and you hide it away from your spouse, leaving her completely in the dark, this can breed mistrust and put a strain on your relationship.
Have an emergency fund
Your emergency fund should have enough cash to cover at least six 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 sum set aside towards savings. Automating your savings is the most convenient way of achieving this.
Review your insurance
Life insurance is a must for dads. 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 cover can impair your financial future and put you and your loved ones in a desperate situation in an instant. Motor vehicle, household, health and life insurance, are just a few of the various policies that are available to protect you and your family. There are educational plans that encourage you to plan for several years before you need the money.
Plan for your children’s education
For the vast majority of people, funding your children’s education ranks as one of the largest expenses you will ever face and it must be carefully planned for. Thinking about your young children’s future education may seem like a lifetime away. However, with the rising costs of education, if sound investments are not made now, covering the huge expenses for the secondary and tertiary education may be a challenge. When your children are still young, you have the benefit of time to select investments that offer the prospect of higher returns over the long term. It takes discipline, consistency and sacrifice to amass the money that you need to educate them and give them the best chances in life.
Next of Kin
In Western cultures, the choice of the spouse as next of kin is the most obvious one, for example, the mother of his children is generally the person in whom a man places the most trust. In Nigeria, however, it is very common for a man to choose his brother as next of kin. In the event of the husband’s death, making the wife your next of kin will save her and the children a lot of hardship given the traditional extended family system where other family members can often forcefully claim their brother’s property. There are numerous examples of widows having to cope with not only the loss of their spouse but also of all their personal possessions and property.
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 as you might think; the law prioritizes your next of kin, and your property will be distributed according to laws of intestacy, which may vary from state to state.
Have an estate plan
It is only by having a clear estate planning mechanism in place, that you can protect your immediate family, including your wife and children, and ensure that your investments and 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 from time to time, to ensure that they are in accordance with your current status and intentions; you might have had more children, wish to include additional beneficiaries, or acquired additional assets and disposed of some.
Review your beneficiary designations
It is important to check beneficiary designations periodically, say once a year, to make sure that they are up-to-date. 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. Many people don’t take this designation that seriously and sometimes even forget whom they designated as time goes by.
Designate a guardian for your children
Considering the worst-case scenario is something that no one likes to think about. But if something happens to both you and your spouse, you do want to be sure that your children will be well taken care of. Some couples disagree about who would play that role; should it be his brother or her sister or a friend? If you haven’t made your wishes clear, the court will appoint someone without any guidance from you; it may be someone that you do not want to raise your children. You should consider several factors including where the guardians live, their financial situation, how many children they have, the way their children are being raised, their spouse and so on. Sit down with your spouse, to discuss the pros and cons of various options and come to a decision and include this in your will. Inform the guardians so they are not caught unawares.
In the end, all the money in the world cannot replace that precious time for bonding, building and nurturing relationships with your children and partner. Make the time.