With Father’s Day coming up, I thought it would be nice to reflect on what it means to be a great financial father.
I’m still a young father. I have 2 little girls (a 2 year old and a 3 month old) but I’ve learned a thing or two about what’s important, and I had a great example in my Father.
Please help add to the list by leaving your comment below with your awesome tip for how to be a great financial father.
Protect Your Kids Financially
Your kids are currently able to live their stress-free life because of your paycheck, business income, etc. If you aren’t there to earn that money, then their world isn’t as stress-free. Not only will they not have a Dad, they’ll now have a Mom who’s left with the burden of your debts, and forced to work to get by.
For this reason, life insurance is key for any new (or older) Dad. Term life insurance is likely all you need. It’s cheap and simple to set up. Go get it, Dads.
If you have assets, you want to make sure you have a last will so that those assets can be properly allocated if something were to happen to you. But a will also help direct for the care of your children. Take some time to have a will set up. Write your own will free if you have to.
Avoid too much debt. Debt puts you and your kids at risk.
Finally, make sure you have a financial cushion, an emergency fund, in place. This helps to ensure that when you lose your job, or when you have a huge financial burden, you don’t have to make radical changes to your financial situation (bankruptcy, foreclosure, etc.) just to get by.
Don’t “Check Out” Financially
One of your main priorities as a father should be setting financial goals with mom so that you are both on the same page and working together. If you don’t know your families financial goals, that’s a problem. Grow up. Plan a meeting with your wife and create accountability for your finances.
Also, mom may be better at “paying the bills”, but that’s no excuse to not be aware of your current financial situtation. At a minimum you should know what’s in your accounts and where the money is coming and going on a monthly basis. Check out the easy to use Personal Capital to see all of your accounts in one place.
Teach Your Kids the Importance of Giving and Saving
Giving isn’t necessarily easy (I’ll be the first to admit that), but it’s easy to teach giving. Simply let your kids see you give. Take them with you on a volunteer mission. Let them help you prepare the weekly Church offering. Let them put it in the offering plate.
Tell them what the money will be used for. Next time you give online to your favorite cause, bring them over to the computer and show them what you are doing. Again, reinforce what the money (or your time) is going to do. If you are giving, your kids will see it and will be more prone to live a life full of giving.
Saving is harder to teach because it’s harder to show them your automatic savings deposits (you do have those set up, right?). This makes the piggy bank, or the three jar system important. Get your kids a piggy bank and teach them to use the bank to save for a goal. Being able to delay gratification is a valuable skill they will use the rest of their life.
Bonus tip: instead of saying, “we can’t afford it”, say, “we’re using our money for something else in the future.”
Teach Your Kids to Respect their Stuff
A kid’s world is full of stuff: stuff they have, and stuff they want. When you talk to them about their things, they naturally understand. Expect them to take care of their things, to put them back in their place, and keep them clean.
Having a respect for their things will help them to spend their money wisely in the future.
Love Your Kids
Hug your kids. Tell them you love them. Show them you love them by spending time with them, playing with them, teaching them things, and my favorite, wrestling with them. Show them that you love their mom by hugging her and treating her with honor and respect.
Kids who get loved will have a great opportunity to thrive financially in life, no matter what their financial situation is now.
What are your tips for great financial fathers?