Financial Strategies for Dads: Securing Your Family’s Future

Being a dad is a weighty responsibility. Boy, is that an understatement! Providing, teaching, guiding: The outcome your family experiences personally and financially is not random; what you do matters. That comes with a dose of reality, too: ultimately, you can’t control all outcomes. That hits home, especially when your kids become adults. It’s not that your role as a parent ends, but it does change.

If you’re reading this, I bet you care enough to think not just about what you’re doing now but what you’re passing down. What can you do to set a strong foundation and chart a prosperous course for your family? Let’s talk strategy; get informed, be intentional, and take action because your family depends on you!

A Framework for Success

Get Informed

First, when it comes to finances, you likely need to learn how it all works. Most of us don’t remember high school econ class, or maybe you were never taught the basics yourself. You don’t need to be a financial wizard, but start listening to reputable podcasts on the drive to work, reading quick articles before bed (like our other blog posts), taking a class on a wide range of topics like Financial Peace University, or learning how to create your own financial plan through a video course like Measure Twice Money. Working with a financial advisor who loves to teach isn’t a bad idea either! 😉

Once you’ve learned about all this stuff, how do you know what to eat and what to spit out? There are so many financial strategies you can employ: alternate investments (like options, crypto, and real estate), authorized user piggybacking to build credit, 0% finance stacking to leverage debt, chasing new account rewards programs, and buying rental real estate for “passive income”. How do you filter the info you've been exposed to? Here are two key principles:

• Beware of influencer rabbit trails. Lots of ideas sound good on the surface. If they sound like taking candy from a baby or are the hottest trends, beware or beAWARE. We are a sounding board for our clients when they encounter interesting ideas.

• Keep it simple. You don’t need exotic strategies to be successful. All financial moves take time and add complexity. Here’s a simple formula: Live on less than you make, save, spend, give. Do that consistently over a long period of time. Period. Have no more complexity than you need.

Be Intentional

What are you trying to achieve? Pay off debt? Save for a vacation? Just get your head above water? You probably won’t think you’re making progress if you have ten goals. You need focus to make progress, so keep it tight and intentional.

When you’re setting goals, ask yourself what message, value, or lesson does this send to my family? Take the example of needing an extra family car once your son with a job starts college. You consider co-signing a loan to help him build credit and get a nicer vehicle, certainly better than the Oldsmobile your dad gave you as your first car. But what message does that really send? That debt is necessary? That he can’t do it on his own? Maybe a better lesson is letting him save and buy a modest car himself over the summer – one you aren’t ultimately on the hook for! Every action you take teaches something - make sure it aligns with what you want them to learn. Two key intentionality ideas are:

• Prioritize. You can do anything you want, but not everything. Maybe that means saying yes to one, but no to two sports leagues or buying a used rather than new “safer” car just because the old one has 120k miles. Pick what matters most.

• Avoid urgency. Emotional decisions are usually bad financial ones. Selling investments in a market panic, making major financial decisions after the loss of a loved one, or fear of missing out on a dream home are all examples of events that can get us all jazzed up. Stay calm. Get wise counsel. Think. Then act.

Put It Into Action

If you put feet to the intentional plan you laid out and don’t give up, you will reach your desired destination. Plus, putting your plans into action will have a tremendous impact on your kids.

One of the most influential actions you can take is modeling a strong work ethic. Invest the time in developing your skills, be reliable, do more than what’s required, avoid complaining (I’m not great at that), and bring home the bacon. These are significant parts of achieving your financial goals and contribute significantly to imparting a work ethic to your kids, because they are watching.

If you want to further teach your kids work ethic, assign chores (try unpaid!) or have them assist with projects, like working alongside you in the yard or assembling the new Ikea furniture. Require them to get a job at the right age.

When it comes to actions, some things are hard to stick to, especially with your kids. The first thing that comes to mind is not buying something you want until you can afford it. You can afford it when you have money in the bank to buy it. With your kids, it’s tough not letting Lucy go to the birthday party if she fails to prioritize what you asked her to do, or not give in to buying something she wants when she whines. These are hard, but sticking to your guns will set your family up for success. Two key action principles are:

• Think long-term. When you have a vision for something more than the next few months, you’ll have the motivation to stick to the actions that will get you there. That means you’ll have sacrifices today for what you envision five years from now. It’s tough in the moment, but you won’t be disappointed.

• Follow through. Do what you say you’re going to do; follow-through changes the trajectory for you and your family. Stay consistent.

Critical Actions for Family Security

I’d be remiss if I didn’t quickly address two critical actions you need to take to set up your family for success: get insurance & finish your estate documents. For some reason, executing on these two is hard for dads (and moms). Just get them done. No questions asked. ASAP!

1. Get life and disability insurance. You need both to protect your family if you can't work or die unexpectedly – the reality is, it happens. Early on, disability is more probable than death. You have lots of options, but you generally need disability insurance that covers 60% of your after-tax income and level term life insurance 10-12x your annual income. Talk to one of our advisors to figure out if you’re covered.

2. Create estate documents. You need to make it clear what happens if you’re incapacitated or die unexpectedly. Imagine trying to pick up the pieces emotionally and figure out how to settle your affairs without a plan in place. That’s why establishing who will have the power of attorney over your finances and health care decisions and defining guardianship through a will is so critical.

A Smorgasbord of Ideas

I’ll leave you with a non-exhaustive list of suggested actions you can take and ones you can use with your kids:

Suggestions for you:

• Get on the same page with your spouse financially by budgeting monthly. If you’re the financial nerd in your family, make sure you get intentional about your spouse knowing exactly how your finances work, from accounts to bills to taxes. The non-nerd doesn’t have to be an expert, but they need to know how to “break glass” in case of emergency.

• Sock away money in a dedicated savings account and don’t touch it for anything other than the intended goal, such as the emergency fund or dream vacation you want to take

• Avoid consumer debt, especially carrying credit card balances. If that’s a problem area, you’ve got to take extreme measures like cutting up and canceling credit cards and using cash for areas you overspend, like eating out. If you’re in consumer debt, pay it down aggressively as a matter of first importance.

• Start a regular, automatic investing program and don’t stop. This could be through your workplace retirement plan or an IRA. This will set you up to be generous, give your kids a leg up, and ensure you have the financial means to take care of yourself and live the life you want.

Suggestions for you with your kids:

• Have financial discussions with your spouse with your kids in the room, and make sure they understand your financial position in an age-appropriate way.

• Open a minor’s checking account that gives you shared access and control. As they get older, use it to help them learn to pay for some of their own expenses.

• If you see your kids lacking motivation, give them more responsibility—that means working around the house or getting a job and paying for logical expenses like car insurance, a tank of gas, and their cell phone.

• Require your kids to take a personal finance class. In 2024, I was the instructor for thirteen students taking Foundations in Personal Finance.

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How We Help

At The Dala Group, we don’t just help you figure out how to invest your money. We help with all aspects of financial planning by taking the seeming chaos and unlimited options and walking with you to determine a clear path. If this is driving you, contact us today to start a conversation.