Single dads have a lot on their minds.
We’re worried about our kids’ health, education, and overall well-being. Sometimes we’re so busy dealing with immediate issues that we overlook long-term ones.
For instance, consider financial planning. Too often, our financial planning consists of making sure we have enough money to make the mortgage payment.
Instead, we should we be planning a secure financial future for our children and ourselves. Even if we have a solid job and an ex-wife who shares expenses, we shouldn’t assume we’ll have enough money for the long haul.
We won’t have enough without solid financial planning. Recently, I talked with Ryan Groce, an agent with Northwestern Mutual life insurance and financial services. I asked him to name the top three fiscal priorities for single dads. Here they are.
The Top 3 Financial Planning Priorities for Single Dads
1. Get life and disability insurance.
You may be young, and you may be in excellent health. But, unfortunately, you could develop a life-threatening illness at any time. Or you could suffer a debilitating injury on the job or at home.
Let’s say you fell off a ladder while painting your house and suffered a traumatic head injury. “You just never know,” Ryan says. Suddenly, you can no longer work – perhaps forever.
Will you have enough in savings to cover a lifetime of expenses? No way – not without adequate life and disability insurance. “You absolutely must have them,” Ryan says. “That’s the starting point.” There are many types and levels of insurance, he says. The key: Determine what you need, and shop for the best prices and features.
2. Develop a long-term investing strategy.
We’re not talking about keeping all your money in a savings account that earns miniscule returns. Instead, you need to consider stocks, bonds, mutual funds, commodities and other types of investments, Ryan says.
“Take a comprehensive, holistic approach,” he says. “Start early. The sooner you put back money, the more it will grow.”
He offers this advice: Consider your age – when will you need the money? And consider your comfort level with risk – if your investments lose value, will you freak out?
“Some people may not like the stock market,” Ryan says. With the help of a financial adviser, you can choose a variety of investments that offer the possibility of good returns without undue risk.
No investment is a sure thing. But diversification is always smart. In other words, don’t put all your eggs in one investment basket. If that investment tanks, you’re a deep trouble. Spread your risk among a variety of investments, Ryan says. “It’s good to re-evaluate every few years,” he says.
3. Draft a will.
You might consider this very low on your priority list. After all, you don’t plan on dying anytime soon, do you? Problem is, no one does.
Without a will, all the work you did acquiring top-notch insurance and savvy investments could be for naught. In other words, you could have amassed a small fortune, but if you hadn’t specified who should inherit your money, you’ve created a nightmare for your heirs, Ryan says.
They could spend years and untold thousands in probate court, while a judge divvies up the money. Inevitably, some heirs will feel slighted, and a family can be torn apart by jealousy.
The best way to avoid this nightmare: Spend a little time and money and prepare a will. This way you are in control of where your money winds up – not a judge.
Life can be fast and furious as a single dad. But slow down long enough to think about the long-term financial future of yourself and your children. If you don’t, you’re not being a responsible father. You’re leaving your family’s well-being to chance.