Sunday 21 June is Father’s Day – and if you are a new parent, there are not only nappies and bottles to get to grips with, but also new demands on your wallet. In your pre-baby life, you might have scanned ads for off-road bikes, now you’re thinking about baby slings and strollers.
What really is the best for your new little bundle, and what should you focus on as you re-examine your financial priorities?
Sarah Nicholson, Commercial Manager of personal finance website JustMoney shares 5 essential finance tips to help new fathers.
Tackle debt If you’ve been making use of debt (such as a credit card with high-interest rates) to support a lifestyle that you can’t really afford, it’s time tofree yourself up. On the other hand, a strategic investment such as a home loan can be a positive move.
Set goals Set goalsthat 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’ve 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’re 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 program 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’ll also need to consider sports outings, gifts for school friends’ birthday parties, aftercare, and transport. To read more about various education options, such as a tax-free savings account, a unit trust, or an endowment.
“JustMoney was established over ten years ago to provide busy and digitally-savvy South Africans with easy online access to financial information, money management tools, products, and services,” says Nicholson. “We partner with trusted financial brands so that you can make informed decisions as your family needs evolve.