Today is Fathers Day. Father’s Day is a
celebration honoring fathers and celebrating fatherhood, paternal bonds,
and the influence of fathers in society. (Wikipedia) It is also a good
time for fathers to consider the critical role they play in the family,
to take stock and to carefully consider their responsibilities by
implementing important financial steps to secure their families. Here
are a few things to note:
Have money conversations with your spouse
Money woes are a leading cause of fractured relationships and divorce.
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. If you have loads of money
and you hide it away from your spouse, leaving her completely in the
dark, this will only breed mistrust and put a strain on your
relationship.
In the traditional African society, men
were generally regarded as breadwinners and women stayed home with the
children and were looked after by the men in their families. Yet slowly,
but steadily, the economic and cultural climate has changed and many
women earn more than their spouses; indeed in many cases they are the
primary breadwinners. How does this affect relationships?
Philip, 40, is a partner at a small law
firm that he co-founded. His wife is an investment banker; she earns
twice his income. For a long time Philip was embarrassed that his wife
was footing most of the major family bills including rent and school
fees. It was his ego he confessed. “I just felt inadequate even though I
know it was baseless.”
Things came to a head and it was
important to have a conversation regarding the salary differences and
the toll it was having on their relationship largely due to his feelings
of inadequacy and not her stepping into the role of “head of
household.”
The conversation changed everything as
they both expressed their feelings and addressed the issue of how the
income differential was affecting them. It gave them both some
re-assurance; he was able to address his feelings of inadequacy, whilst
she felt relieved of her feelings of guilt for her success, as they
planned together as a team for the benefit of their family.
Establish 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 saving and investing. Automating your
savings is the most convenient way of achieving this. No job is secure;
many are losing their jobs. An emergency fund helps to tide you over
difficult periods and cushions the impact.
Save 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 thus 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 post secondary years 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.
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 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.
Put an estate plan in place
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; strict rules rank your next of kin, and your
property will be distributed according to laws of intestacy, which may
vary from state to state.
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 periodically, say once a year, to ensure that
they are in accordance with your current status and intentions; you
might have had more children or wished to include additional
beneficiaries, may have acquired additional assets or disposed of some.
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. Many people don’t take this designation that seriously and
sometimes even forget whom they designated as time goes by. In Western
society it is usual for a man to name his spouse as his next of kin. In
Africa 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.
Designate a guardian for your children
Considering the worst-case scenario is something that no one likes to
think about. But if something were to happen 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 perhaps? 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 would have considered several factors including where the guardians
live, their financial situation, how many children they have, the way
their children are being raised 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.
Give your family the gift of your time
Many fathers do not make time for their children. In the final analysis,
it is not all about money; all the money in the world cannot replace
that precious time for bonding, building and nurturing relationships
with your children.
Happy Fathers Day!
About Nimi Akinkugbe
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. You can reach Nimi via the following: Email;
info@moneymatterswithnimi | Website:
www.moneymatterswithnimi.com | Twitter:
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