Quote of the Week: “A good battle plan that you act on today can be better than a perfect one tomorrow.” General George S Patton.

For many people, personal worldviews change the instant they become parents. When your firstborn child enters the world, your priorities change from thinking of your own goals and interests first to the responsibilities of caring for the child; and this includes financial responsibilities as well.

1. Saving money for their university education.
All parents want the best for their children, a bright future full of achievement. With steadily rising expenses in our daily lives, raising children is becoming more and more expensive. The growing concern for many parents is their financial readiness to send their children to a tertiary institution. While this may not have crossed the minds of many new parents, or even those with teenage children, it is an area that needs to be addressed; and the earlier the savings are set up, the better. The best way to do it would be to set up an automatic savings program, like a standing order, to an account dedicated towards saving for your children’s tertiary education. Money market funds are a good place to start because they give competitive returns, while at the same time ensuring minimal risk in your investment. That way, you get to build the savings you would need to fund this endeavour in the not-so-distant future, in a disciplined fashion. 

 2. Obtaining a retirement savings plan.
As far-off as this may seem, saving for your own retirement may be as personal as it can get, but it works well to ensure that you are able to take care of yourself in retirement. The other objective here is to ensure that your children will not be forced to take care of you financially in retirement, and hence be in a position to build and sustain families of their own without additional burdens. Apart from the financial planning involved in saving for retirement, one can significantly reduce the odds of contracting some expensive medical conditions that often hit us late in life by taking steps now, such as adopting a healthy diet, getting proper exercise, and managing your stress, among others. These actions can reduce the possibility of getting overburdened by high bills  or medical care expenses. It is also advisable to talk to your family about your financial plans for retirement, including how you will cover your living  expenses and your strategies for long-term care. There is a good chance that at some point in your life, you will need them to help implement your plans. It also gives them some assurance that you have thought about the future and that you will be OK in your retirement years. It is admirable that most people do not want to be a burden to their families. By planning ahead, you can help avoid this fate, so that you and your children can truly enjoy each other in your later years. Also, if you would wish to be able to ultimately leave your children an inheritance, this kind of planning is extremely important.

3. Avoiding the temptation to spoil them.
Admittedly, this may be a tough one for most parents to always follow. However, it is important to not go too far in giving in to what your kids want and enjoy. After all, life is not about getting what you want all the time. Needs come first. It is important for children to be able to handle some basic disappointment, and learn to be patient. The most importance lesson to teach them here is that instant gratification will not be there in adulthood. Teaching your children the importance of distinguishing between wants and needs is an important lesson that will go to ensure that they grow to be financially responsible adults.

4. Teaching your children about personal finance.
“Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime.” To support the previous point, think about your children and how they will eventually handle money as young adults. Share this interest with them by teaching them those lessons and practical strategies for managing finances, a concept we have discussed in detail in a previous article titled “Four money rules for your children.”

5. Having an updated will.
If you have a will, you can determine what happens to your assets in the event that you and your spouse die. You can spell out division of assets, and how  they will be distributed. This will save your family the legal headaches and ensure that they know all your assets and where they are.

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