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Father's Day is fast approaching, and while this is a time to celebrate, many dads may want to consider how to approach financial planning for the future.
Father’s Day is just around the corner, which means sons and daughters across the country will no doubt be thinking of special ways to express their love for their dads on September 3.
On occasions such as this, we often remember the obvious things our dads have done for us – teaching us to ride a bike, helping with our homework or giving us our first driving lesson. But what about the more subtle skills we pick up from our fathers, like money management?
Whether you’re already a dad, or hope to be one in the future, here are some of the financial lessons you may want to pass on to your children as we look ahead to Father’s Day.
Only 56.6 per cent of parents have written a will, according to Real Insurance figures.
Now could also be a good time to check if your own finances are in good shape!
Lesson 1: Retirement planning
Fathers have a big impact on how their kids approach retirement planning. In fact, one-quarter of people in a John Hancock Financial survey said their dad was the most important person they turned to for such advice.
Dads often set up savings accounts or piggy banks for their children and encourage them to put aside a portion of their pocket money and other income for rainy days.
This is great training for adulthood, but you may need to reinforce this with gentle reminders of the importance of retirement saving. After all, nearly three-quarters of 18 to 19-year-olds in a Roy Morgan Research Poll believed they were too young to start planning at their age. However, it’s never too early to begin thinking about your golden years.
Also, don’t rely on the classic parenting get-out clause of ‘Do as I say, not as I do’ – make sure you practise what you preach by being proactive with your own retirement strategies.
Lesson 2: Estate planning
No one wants to think about a loved one dying, particularly not when celebrating occasions like Father’s Day. But this reluctance to approach uncomfortable, potentially morbid topics may be part of the reason that only 56.6 per cent of parents have written a will, according to Real Insurance figures.
Furthermore, only one in three parents believe they have enough life insurance to cover their needs, while 40 per cent haven’t appointed guardians for their children in the event of their death.
You should communicate your estate planning wishes to your family should the worst happen.
Formulating a comprehensive estate plan is just the first step; you must also let your family know your final wishes and the preparations you’ve made for their welfare should unforeseen circumstances strike.
Don’t forget to appoint powers of attorney. These are legal documents that set out who you want to make important life decisions on your behalf if you otherwise become unable due to disability, illness or other means.
Lesson 3: The value of hard work
Did you do chores as a kid? If so, science says you’re more likely to be successful. A University of Minnesota study found that the best predictor of achievement in young adults was whether or not they helped around the house as children.
Participation in part-time jobs, household chores and/or sports clubs is more likely to lead to success in adulthood than social class and other factors.
Harvard University made similar findings. Its research, published in the Boston Globe, revealed that participation in part-time jobs, household chores and/or sports clubs is more likely to lead to success in adulthood than social class and other factors.
Teaching your kids the value of hard work should set them in good stead for later years, and you can even link their chores to the pocket money they receive to give them an early lesson in what the workplace could be like.
We hope these financial lessons have given you something to think about this Father’s Day – even if it’s just a reminder to reassess your own money management.
If you’d like to discuss financial planning for you and your family, please get in touch with Invest Blue.
What you need to know
This information is provided by Invest Blue Pty Ltd (ABN 91 100 874 744). The information contained in this article is of general nature only and does not take into account the objectives, financial situation or needs of any particular person. Therefore, before making any decision, you should consider the appropriateness of the advice with regards to those matters and seek personal financial, tax and/or legal advice prior to acting on this information. Read our Financial Services Guide for information about our services, including the fees and other benefits that AMP companies and their representatives may receive in relations to products and services provided to you.
