Growing up, my dad was all about fiscal responsibility. We didn’t have the coolest toys but we did have comfort in knowing that things were under control.
Now that I’m a parent, I’ve taken some of his techniques into the 21st century. In honor of Father’s Day, here are some financial tips for all dads to consider:
Plan your paternity leave
Paternity leave is important for bonding and giving Mom the help she deserves. However, some companies only offer unpaid leave or make you use vacation and sick days. The first step is to talk to your manager about your company's policy. Once you know if your income will be affected, you can adjust your budget or time off if necessary.
Create a family budget
Each child has their own set of costs. For example, my 2-year-old won’t need diapers like my newborn, but her gymnastics, swimming and ballet classes aren’t free. Creating a family budget might take some serious thought but it’s important. I mean, who wants to tell their daughter there’s no more ballet because Daddy forgot to budget for it?
Save for retirement
I don’t want to live in my kid’s basement after I retire, so saving often is important. If your company offers a 401k match, take advantage of it. It’s free money. For other ways to build your nest egg, follow these smart ways to save for retirement.
Open a 529
A 529 is a tax-advantaged account used for future education costs like tuition, books and housing. Think of it like a special savings account for college. A unique (and awesome) thing about a 529 account is you can share the account number with family and friends. I tell people all the time to skip the $20 toy for birthdays and holidays — donate to their 529 instead.
Research tax breaks
Uncle Sam may be a distant relative, but he can be generous to parents during tax season. I’ll be claiming two dependents next year so I need to doublecheck and make sure we’re getting every tax break available. For information on basic tax credits and exemptions, check out the following links:
Start or build up an emergency fund
An emergency fund is a savings account for the unplanned moments in life. And as a parent, I know the possibilities are endless. I’ve personally built up an emergency fund so I won’t have to touch other bank accounts or add debt to a credit card. I haven’t used it yet, thankfully, but it feels good to know it’s there.
Here’s to you, Dad
There’s nothing like being a father, and with great privilege comes great responsibility. I remember how hard — and smart — my dad worked to provide his children with a secure financial future. Now it’s my turn.