“Taking financial responsibility for a family in 2017 means that you’re tackling many challenges,” says John Manyike, Head of Financial Education at Old Mutual.
South Africa’s economy is struggling to grow, unemployment is high and downgrades by credit ratings agencies lower the chance of interest rate cuts, thereby stretching the family budget.
In many families dads take care of big ticket items such as mortgage bonds, children’s school fees and insurance policies, among others. It’s not easy keeping ahead of the family finances, but Manyike says it can be done.
He has three money management tips for Dads this Fathers’ Day:
The first step in getting debt under control is knowing how much it is and what it is costing you. List the amount of the debt and the interest rate charged. Then pick one debt and set aside an extra amount each month to pay this off.
“Pay off the most expensive debt first,” is Manyike’s tip. This is the debt that is costing you the most. For example, if you have a bond at a 10% interest rate and a loan at a 20% interest rate, pay off the loan first.
Dads score quite well in this area. Research from Old Mutual’s 2016 Savings and Investment Monitor found that 91% of Dads used formal savings products and policies. 57% of Dads had pension or provident fund savings.
“Make sure you speak to your financial adviser at least twice a year or when there are financial changes in your life,” advises Manyike.
Educate and encourage your children to manage their money wisely. 63% of the Z-generation (18 – 23 year olds) surveyed in the 2015 Old Mutual Savings and Investment Monitor said their parents taught them the most about money and how to manage their finances.
Manyike’s final tip for Fathers is to lead by example and bear in mind that a wise man leaves an inheritance for his children’s children.