Hey, dads: You know that "World's Greatest Dad" T-shirt you sport every Father's Day? Well, you deserve it! You not only work hard from 9 to 5 to provide your family with a good life, but also dutifully slog through your honey-do list and coach the Little League team.
In return for the love your kids will show you this Father's Day, give back to your family by implementing these four financial planning musts.
1. Review Your Insurance.
It's important that you maintain an appropriate amount of life insurance. That way if something happens to you, your family's future financial needs -- like living expenses and college costs -- will be adequately covered.
Your employer may offer you life insurance as part of a group plan. Typically, the coverage you're granted is either a flat dollar amount (like a $50,000 death benefit) or a multiple of your salary (say, three times your annual base salary). But that amount of coverage may not be enough for your family. If it isn't, be sure to supplement with either a term or whole life policy.
Also, consider disability insurance. Again, your employer likely offers coverage up to a certain amount. But make sure it's enough to fund your family's needs in the event you can't work for a while.
2. Designate a Guardian for Your Children.
Lots of parents get stuck when it comes to designating a guardian for their children should the worst happen and you become unable to raise them yourself. Parents often disagree about who would be best, and no one likes to think about someone else raising their kids.
But if you haven't made your wishes clear, the court will appoint someone without any guidance from you. Most commonly, the courts choose a member of the family. But maybe you don't want certain family members raising your children.
The best way to prevent this from happening is by sitting down with your spouse, hashing it out, and getting the paperwork done.
3. Review Your Beneficiary Designations.
Check your beneficiary designations annually. That might seem like overkill, but it's a good habit to get into. You may have been so busy changing diapers that your sleep-deprived self forgot to add your 6-month-old's name to your accounts.
Review your current designations and make sure they're up-to-date. Remember to do so for all of your IRA accounts, 401(k) plans, and life insurance policies.
4. Save for College.
It's never too soon to start saving for your kids' college. With the average annual cost of an out-of-state public university education standing close to $34,000, it takes discipline and sacrifice to scrape together enough cash.
The best way to amass that money is with a tax-free 529 college savings plan. Withdrawals used for qualified higher-education expenses like tuition, books, and room and board are tax-free.
Some states allow you to deduct part of your contribution annually on your tax return. And 529 plans also give you the flexibility to switch beneficiaries, which is great if you find out one kid isn't college material yet the other is Harvard bound.
Take time this Father's Day weekend to kick back and relax with your family. But once the workweek rolls around, implement these personal financial planning essentials. You and your loved ones will be better off for it.
Nicole Seghetti is a frequent contributor to The Motley Fool.
5 Out-of-the-Ordinary Father's Day Gifts
4 Personal Financial Planning Musts for Dads
To you, he may be just dear old dad, but chances are that your father still dreams of being James Bond. While day-to-day life is woefully lacking in options for killing spies and taking death-defying leaps off cliffs, you can still help him channel the 007 look with a present from Tool Logic. The company's credit card-sized tool kits will add a touch of sleek style to your dad's wallet, and come with options ranging from nail files to compasses to deer-gutting knives. Most choices are available for less than $30.
Wallets are another classic Father's Day gift that are overdue for a little update. If you want to help your dad bring his billfold into the 21st century, skip classics like Coach or Buxton in favor of one of Stewart/Stand's offerings. Starting at $25, the company's wallets are woven out of stainless steel fabric, which blocks hackers from remotely accessing the chips embedded in your dad's credit cards. But paranoia is really just an excuse: Bottom line, these wallets look cool. Between their tastefully reflective surfaces and their chain-mail style edges, Stewart/Stand's billfolds are the kind of thing that King Arthur would carry.
Yes, yes, we know: A membership to the microbrew of the month club is a perennial favorite, and it generally seems to put a smile on dad's face. But this year, why not think outside the six pack? If your dad sometimes has a hard time choosing between a Martini and a Manhattan, you might try halving the distance with a barrel-aged gin like Ransom. After distillation, this tipple is kept in toasted barrels for a few months, where it picks up a slightly smoky flavor. The final product is amber-colored, with a flavor that lands somewhere between the flowery sophistication of gin and the coarse character of bourbon. What's more, at $25 to $40 per bottle, barrel-aged gins land at the lower end of the premium spirit price range.
Rum usually gets little respect; it's viewed as a sweetly-flavored mixer that doesn't have the character to stand up on its own. A Venezuelan company is trying to change that perception with Santa Teresa 1796, a rum that is finished in a collection of cognac and bourbon casks. Again, the wood deepens the basic rum flavor, yielding a finished product that is sweeter than whiskey, but has a comparable level of character. If your dad likes bourbon but has a bit of a sweet tooth, this might be just the thing to give him a Father's Day smile.
Then again, if your dad is a more creative type, he might be interested in creating his own barrel-aged cocktails. Tuthilltown Spirits, the New York-based distiller of Hudson whiskey, offers a 375ml aging kit for $12.50. Basically, all your father has to do is mix up his drink of choice, pour it in the bottle, and wait a few weeks for the charred oak to add a little age and character to the formula. And, once he gets the hang of aging, Tuthilltown offers bigger options, including a five-gallon barrel that costs $166.