Dads are known for always giving advice. But this Father’s Day, we’re turning the tables on dear-old Dad. We’ve got financial advice for dads with kids of all ages and stages.
What is a “money-do” list?
You’ve heard of a “honey do” list for husbands- a checklist of things for them to do around the house. This is what I call a “money-do” list for dads- things they should be thinking about when it comes to their finances. It’s important for both parents to get their finances in order because, like it or not, they are setting an example for their kids.
5 Tips dads should be doing to get their financial affairs in order, I’ll break it down into 5 categories:
I know it’s hard to believe when you hold your new baby, but this bundle of joy will someday grow up. And it’ll happen sooner than you think. By the time he or she hits college, it could cost you nearly half-a-million dollars! You should start saving while your child is still in diapers. Plan to put away about $250 per month to pay for an in-state, public college. If your child goes to a private, non-profit college, you’ll need twice that – $500 a month!
Talking to Toddlers:
Kids start the process of understanding money at an early age. Even toddlers will understand you get money by working, and you need money to buy things. 3 years old is a great time to teach your kids that you may have to wait before you can buy something you want. And at 4 years old, you should have the discussion about the difference between wanting something and needing something. Start talking to your kids early, and make sure you continue as your kids grow.
Adventuring into Adulthood
Of course, you want to help your kids as much as you can, but once they’re adults, you really need to be careful- especially if you’re deciding whether to give them money. I’ve seen it happen too many times that a dad will put his own retirement in jeopardy to help his kids pay for college or pay off credit card debt. I tell my clients they need to pay themselves first – you don’t want to be a burden to your kids later in life.
Dad’s Tough Talk
You want to make sure you are talking about retirement, inheritance and elder care with your adult children. It can be a tough conversation, but let your family know you care about them, and you want to avoid extra headaches and stresses for them after you’re gone. Without a financial discussion, it could be like a jigsaw puzzle for them trying to put all the pieces of your finances together. Topics to discuss include: legal issues, health care, income and expenses, and where you keep your financial records.
Every grandfather wants to spoil his grandkids, and I’m not here to try to stop you. But think about gifts that have a positive financial impact on your grandkids’ future. A great idea I recommend to my clients is to start an account when their grandkids are young, and donate money for each birthday or holiday. By the time they reach adulthood, they’ll have a nice amount of money to help pay for college or maybe their first home.