Be it the conventional norm or practical realities of many households, men usually tend to be the breadwinners and the providers of the household. But as a father you need to ask yourself two questions: Is providing for your child good enough? Are you fulfilling your duties by saving for your child’s future? If your answer is yes to both, you may be committing a classic parenting mistake on three counts. First, just saving is not enough, investing wisely is crucial. Second, you may be shying away from teaching your children to be financially conscious, and this is important because your children will become adults one day and will be in charge of managing their households. Third, straightjacketing your role means the entire responsibility of instilling financial consciousness falls on the spouse which can be counterproductive.
Vighnesh Shahane, 49, managing director and CEO of IDBI Federal Life Insurance Co. Ltd, believes that households need to put up a united front because children emulate the parents. “Every parent saves enough for the kids, but parenting is much more than that. It’s also about instilling the right values. We (he and wife Jyotsna Shahane) don’t want our kids to grow up with a sense of entitlement," said Shahane. “Our common goal is our children should grow up to learn and respect the value of money. While my wife does the heavy lifting, I participate and support her in any way that she wants me to," he added.
For the Shahane household, financial consciousness does not stem from the fact that Vighnesh works in the financial sector, but from the fact that both Vighnesh and his 48-year-old wife swear by their middle-class upbringing and want their children, Ishaan Shahane, 20, and Aastha Shahane, 10, to imbibe the same values.
For Vighnesh, a father’s job doesn’t stop at being a provider; it also extends to being an active participant in bringing up financially responsible children. And if this hasn’t been your parenting goal as a father, it’s time for course correction. On the occasion of Father’s Day, we give you four handy tips that will set you on the right path.
Invest the savings
You are not doing enough if you are saving but not investing wisely. “The common practice is to open a Public Provident Fund account when the child is born, but saving for the child is a long-term goal and over a period of 15-20 years, even index funds give better returns. Investing without proper asset allocation doesn’t help achieve the desired results," said Amol Joshi, founder, PlanRupee Investment Services, a financial planning firm.
Buying the right insurance cover is equally important as is having a succession plan. “One needs to make sure all investments clearly spell out nominee details. Joint account with the spouse is always advisable and one should also make a Will," added Joshi.
If the exercise looks too much of an ask, work with a planner.
Be a role model
Managing your finances can be outsourced to professional help, but instilling the right values is a job that falls squarely on your shoulders as a parent. And no, you can’t and shouldn’t outsource this to your spouse. “In my experience, most fathers leave the job of instilling financial consciousness in the kids to the spouses. It’s primarily to do with the social conditioning that men are seen as providers and therefore prefer to indulge the child rather than discipline. But this skews the equation and the spouse ends up being the villain or is feared as the strict parent," said Mrin Agarwal, founder director of Finsafe India Pvt. Ltd and co-founder of Womantra.
One way to play a meaningful role is by setting an example. “It’s unfair to enforce a certain set of values in the kids if you don’t believe in it. When parents fall into peer pressure, the kids also fall in the same trap and then it’s a vicious cycle," added Vighnesh. For the Shahane household, teaching children is by leading from the front. “Social media adds to a lot of pressure with nearly everyone taking exotic vacations and showcasing flashy lifestyles. But if you stick to your value system, the kids will follow suit. For instance, Ishaan takes public transport and never stretches his budget because he knows we won’t subsidize him," he said. Ishaan, who is studying sport management, a rather unconventional stream, is completely at ease with living within his means and this is largely because he is aware of the value system his parents follow. This brings us to the next tip, which is to share.
Fathers, who take their role of a provider seriously, often dream of making every wish of their children come true, but this only adds to a sense of entitlement in the children which can later manifest itself by making them financially irresponsible. And there’s undue pressure on the father.
It’s important to set the expectations right and that happens when we let the kids in on household finance. “When the child is very young, the conditioning has to be by setting an example. But when the child becomes a teenager, you can involve the child in budgeting exercises and as the child grows you can start sharing details of your investments. For instance, for the child’s higher education, be transparent about how much you have invested and what is it that you can afford," added Joshi. Being honest and transparent goes a long way in setting the expectation right for yourself and for your child.
Teach the child
Being financially responsible is a habit and lifestyle, but it’s also about knowledge. Teaching your children basics of money, therefore, is yet another meaningful parenting task. “I was a banker when Ishaan was about nine years old. I took him to the bank and explained what a bank account was. I opened an account for him and would teach him to save from his pocket money and invest the saving in a fixed deposit. He understood the concept of interest and the fact that if he saved instead of spending he would be better off in the future. Now I am teaching him about equities and systematic investment plans,"said Vighnesh. Clearly the conditioning of the elder sibling has rubbed off on Aastha, who according to Vighnesh, is more careful with her pocket money.
“Most children today grow up feeling entitled and the difference between need and want is more or less blurred. This is largely the fault of parents who think kids don’t need to learn about money much less money management," said Saurabh Bansal, founder, Finatwork Investment Advisor, a Sebi-registered investment advisory firm. “Often when we see clients struggle with money management, the root lies in their conditioning during childhood," he added.
Much like everything else, the conditioning needs to happen right from the start and you have an important role to play because as a father, you are not off the hook just because you provide. You need to be an active participant of the household and yes put up a united front.