Handy savings tools for dads
As a dad, you proudly think of yourself as Mr. Everything.
You’re a handyman.
You’re a car mechanic.
You’re a grill master.
And, naturally, with all those hilarious dad jokes you tell, you’re a comedian, too. But do you know what’s not funny? Not having a plan in place when it comes to managing your money and protecting your future. After all, only 48% of Americans today, dads included, feel “very healthy” about their economic status. In fact, due to the COVID-19 pandemic, just 44% of men remain confident in their current financial approach.1,2
Of course, there is good news. Because you’re Mr. Fix-It around the house, there are plenty of tools you can use to tighten your wallet, grow your nest egg and nail down a sturdy savings strategy for you and your family.
Ready to get to work?
Celebrate Father’s Day by following this basic blueprint to gain control of your income and achieve your long-term goals:
‘HAMMER’ OUT A BUDGET
Here today. Gone tomorrow.
If your paycheck typically doesn’t last long, that means it’s probably time to start taking charge of your spending. Overall, Americans waste almost $1,500 a month on nonessential items, including dishing out over $200 at restaurants, about $25 for music streaming services and nearly $75 on gym memberships. Add it all up, and that’s close $18,000 per year for things people may want but likely don’t need.3
Establishing a budget is an easy way to identify your tendencies and make the most of your hard-earned salary — while putting less stress on the Bank of Dad. There are plenty of online resources that can help you categorize your bills, track your transactions and limit your purchases. Once you see where your cash is going, you can decide where to cut back and conserve more.
‘INSTALL’ A TRAVEL FUND
“Dad, are we there yet?”
When you have kids, vacations are rarely a walk in the park. From the second you leave the driveway to the minute you arrive home, an out-of-town getaway can be an overwhelming experience for any parent. There are hotels to book, bags to pack and activities to schedule. And, yes, there’s one urgent question to answer.
While you may run low on patience, though, the furthest thing from your mind should be running low on money.
On average, a summer trip for a family of four can total almost $5,000 when factoring in lodging, transportation and food.4 But rather than relying on a credit card to cover those costs, and tackling a hefty pile of debt when you return, why not begin preparing for your next adventure in advance? Consider opening a separate account and allocating a specific amount each pay period to help pad your cushion for trips. To make it simple, sign up for automatic deposit so you’re able to contribute on a consistent basis. Then, no matter what destination you visit, your children will thank you — and so will your budget.
‘BUILD’ A FOUNDATION TOGETHER
Whether you’re known as a Rad Dad, the World’s Greatest Dad or the Best Dad Ever, your kids look up to you.
Especially as they get older.
If you have a teenager who is eager to learn about the importance of money, you can play a major role in teaching him or her about the benefits of saving. But it’s also a team effort. As soon as your son or daughter lands their first job, you can help them set aside even more cash by implementing a “Dad Deal.” In other words, to encourage them to keep pursuing their dreams, you match their input up to a certain percentage based on what you can afford. For example, if they set aside $100 each month for a new computer, you could match it at 100% (or lower) and give $100 to ultimately double their value.
Not only can this process help increase your teenager’s balance, but it can also help improve their financial literacy as it resembles the same structure as a potential employer match in a workplace retirement program.
‘MOW’ DOWN A PRICEY HABIT
It may sound like a broken record, but making a little change to your normal lifestyle can end up having a huge impact down the road. You don’t have to pinch every single penny and spoil all the fun, though. For now, just eliminate one item from your regular routine to free up a few extra bucks. Cancel your satellite radio subscription in your car. Get rid of the premium sports package in your TV lineup. Remove an app on your phone that requires a recurring payment to access its features and capabilities.
Most importantly, avoid buying that gourmet cup of coffee on the way to the office every morning, which could equal more than $1,000 per year. Instead, if you decided to invest those dollars over a 25-year span, generating a modest rate of return, you could accumulate an additional $35,000 for your retirement.5,6
Start saving for your future with an Empower Investment Account
1 Empower Institute and Personal Capital, "Back to (Financial) Basics," January 2021.
2 Empower Institute, “Financial Wellness: Exploring consumers’ definitions, milestones and barriers to financial wellbeing,” May 2021.
3 Maurie Backman, USA Today, “You don't need that: Average American spends almost $18,000 a year on nonessentials,” May 2019.
4 Kim P., Credit Donkey, “Study: Average Cost of a Vacation,” October 2018.
5 Empower Institute, “The Road to Retirement Success: Strategies to decode human nature and improve employee savings,” August 2018.
6 FOR ILLUSTRATIVE PURPOSES ONLY. This hypothetical illustration is not intended as a projection or prediction of future investment results, nor is it intended as financial planning or investment advice. It assumes an 2% annual rate of return and reinvestment of earnings with no withdrawals. Rates of return may vary. The illustration does not reflect any associated charges, expenses or fees. The tax-deferred accumulation shown would be reduced if these fees were deducted.
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