7 financial pointers you need as a father

Getting your finances in order can also help you become a good father and lay the foundation for your kid or kids to start learning to handle money wisely from a young age. Here's how you can get it done.

Financial pointers father
Having a new child, especially your first one is exciting but can also be a whole lot stressful and scary at the same time. The joy that comes from having your own baby is balanced out by all the stress from the new responsibilities, extra expenditure, the sleepless nights and whatnot.

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A child brings a whole lot of responsibilities and expenses along with joy and happiness. Revisiting your financial status and making new plans can help you get a head start on financially protecting your family in this new phase. Here are 7 financial pointers you need as a father.

Life can be quite overwhelming for a dad. That’s why it is so very important to take some time off to stop, assess your financial condition and plan for certain adjustments that will make the next few years easier for you and your family. 

Why you need financial pointers as a father

It’s true that having a child can lay a lot of stress on your finances, but it’s also one of the best times to take stock of your finances and plan your way forward. In many ways, this phase can help improve your relationship with money and make you financially responsible. Getting your finances in order can also help you become a good father, and lay the foundation for your kid or kids to start learning to handle money wisely from a young age. 

Here are 7 pointers that can help you start this phase of life on the right foot. 

Create a budget and a system for yourself

Learning to create budgets is an important life and financial skill. Creating a budget helps you create a framework for your money to work in. However, while creating a budget can be relatively easy, sticking to it and committing to spending your money as planned is the tough part. Having a new baby can throw your budget out of shape if you aren’t prepared for it. That’s why it is important to restructure your budget to include the new expenses that will come up soon. Apply these financial pointers as a father.

Create a system for yourself, something that will help you segregate various expenses and account for them accordingly. Keep family essentials such as groceries, rent or mortgage payments, utilities, and baby needs in one group and others such as entertainment and dining out in another budget. This can make it easier for you to track your expenses. 

Start an emergency fund right away 

If you haven’t already created an emergency fund by now, start right away. This fund should contain at least 6 to 10 months’ worth of expenses in it. You don’t have to put in the entire amount right away, but start slowly and build it up.

Set aside about 10% to 20% of your monthly income till you have enough saved up in it. If you’ve already started creating an emergency fund, perhaps you should try saving up more so that you cover your baby’s expenses as well. This way, even if you run into financial trouble, your family’s expenses for the next few months are in order. 

Diversify your savings 

As the old saying goes, don’t put all your eggs into one basket. Similarly, don’t have just one savings account. Spread out your savings into various buckets. Start a college fund for your kid, but also make sure you’re contributing towards your retirement as well along with your regular savings and emergency fund. What better ways to rock as a father than to use these financial pointers.

Make sure you focus on building your retirement nest egg along with everything else. No one else is going to help you with your retirement fund. A great way to do this is to maximize the retirement plans offered by your employer. 

Set aside some money for fun stuff

“Fun money” may seem like it goes against the principle of being cautious with money and savings. But, in reality, it is the opposite of that. Fun money is the amount you set aside for yourself to enjoy once you’ve accounted for all other expenses. It’s like a little reward for yourself for being responsible with your budget and spending. You can also lighten up with these Father’s Day jokes.

This way, you get to have fun and spend a bit on yourself and your family without feeling guilty about the expenditure since it’s already budgeted for having fun. In many ways, this can make you more financially responsible. A good way is to automate this amount every month into a separate savings account. 

Use your credit card to your advantage 

If you use credit cards, make sure you’re using them to your advantage. Apart from the benefit of giving you money on interest-free credit for a period, most credit cards also come with a number of rewards programs. Since you’re bound to be spending more now that your new baby is here or arriving soon, you should look at maximizing the rewards you get from these programs.

Every eligible spend will give you certain points or cashback. Most of these rewards don’t expire either. So, accumulate them over time and redeem them for gift cards, travel options, fuel money, and so much more. Check the rewards programs of your cards to find out the eligible expenditures and the rewards they offer. 

Update your insurance policy 

Your life insurance policy serves as financial protection for your family in case something unfortunate happens to you. Of course, thinking about not being around anymore is not what you want to be doing when your new child is here, but don’t forget to update your policy with your child’s name as well. If you don’t have life insurance, get one right away.

This way, even if you pass away, the people who depend on you for financial support will receive care. Make sure that your policy offers coverage of at least 10 times your annual income. Also, make sure you get disability coverage so that your family continues to get an income if you are suddenly disabled. Compare various policies on the market to get the best coverage and features for the best rates. 

Create a will 

Just like a life insurance policy, a will is also vital to ensure that your assets and money go to your family and no one else. You may also have to create a power of attorney to decide how your estate will be divided and a guardian for your kids if both you and your partner pass away. In your will, you can decide who gets what and how much. Contact an experienced lawyer to help you draft your will in the best manner possible. 

This page is purely informational. Line does not provide financial, legal or accounting advice. This article has been prepared for informational purposes only. It is not intended to provide financial, legal or accounting advice and should not be relied on for the same. Please consult your own financial, legal and accounting advisors before engaging in any transactions.

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