Financial Tips for New Dads

Peter Dunn is the author of What Your Dad Never Taught You About Budgeting. It was released in 2006, and has become an essential tool for married people all over the country. Peter is quickly becoming one of the preeminent experts on the topic of money and marriage.  Check out his website at http://www.petetheplanner.com

Pete the Planner’s money tips for new dads  

1.      Lead by example. Kids can pick up your money habits as soon as they are 3 years old. You need to be able to practice what you preach. Developing a child’s money skills is a crucial part of childhood development, so you need to make sure that you work on your skills first.

2.      Setup a savings account for Junior. Chances are that you may get some monetary gifts from time to time. Setup up an account at your bank so that you aren’t comingling funds.

3.     Update your life insurance. Guess what? You aren’t immortal. You are, actually, going to die some day. Make sure that your life insurance is in order. I recommend having life insurance that is equal to ten times your income.  Term insurance is a inexpensive way to fill these needs. Don’t procrastinate. You’re a father now. This is the right thing to do.

4.     Setup a 529 plan. College, baby! College. The only way to be able to afford college these days is to start saving early. Yes, the cost of college is ridiculous, but that doesn’t mean that you should ignore it. Consider a state sponsored 529 plan. They have more tax advantages.

5.     Buy your kid a piggy bank. This is the best tool to teach kids about money. You need to make savings fun. There is nothing more fun than a piggy bank.

6.     Don’t spend too much on gifts for your child. Little kids often like the box their gifts come in more than the gifts themselves. I know that you love them, but spoiling a youngster is simply a waste of money. They don’t understand materialism yet. Don’t make them wise to the ways of materialism. It is an ugly road

7.     Adjust your budget. The cost of diapers, formula, and all other things that come with babies tend to add up. You need to make sure that you are subtracting from other spending categories. Your money supply isn’t endless. Don’t forget to adjust. You need to be frugal early on.