5 essential finance tips for new fathers
New fathers will not only have to contend with nappies and bottles, but also new demands on their wallets. “It’s important to start planning and adopting new habits now, so that you are prepared for future costs such as education,” said Sarah Nicholson, commercial manager of personal finance website JustMoney. “Appropriate insurance will also ensure that if you or your partner cannot earn an income in future, at least some of your child’s needs will be met.”
Tackle debt: If you have been making use of debt (such as a credit card with high interest rates) to support a lifestyle that you cannot really afford, it is time to free yourself up. On the other hand, a strategic investment such as a home loan can be a positive move.
Set goals that will help you to secure a healthy financial future for your family. Plan your monthly budget and determine how much you can save. Once you have paid off your debt and saved enough to cover about three months’ worth of living expenses, you can consider investing.
Cover yourself: Insurance policies that deal with life-changing events such as disability, death and retirement provide security through either a lump sum payment (for example, on the death of a spouse) or an income in the long term; for example, if you are disabled and cannot carry on earning a salary. Examples of long-term insurance policies include life insurance, funeral policies and retirement annuities.
Make the most of medical aid: If you are a member of a registered medical aid scheme, your new baby should receive immediate cover. Check your plan to see if there are any particular perks for babies, such as a dedicated programme for newborns. The best medical plan for you and your baby will depend on the baby’s needs and your budget.
Plan for education: Many parents choose a dedicated education plan to save for high school or tertiary education fees. Keep in mind that education involves more than school fees - you will also need to consider sports outings, gifts for schoolfriends’ birthday parties, aftercare and transport.