What's a dad worth? The correct answer, of course: Priceless.
But just in time for Father's Day, a new survey puts an actual price tag on a father's worth around the house: About $20,000, based on his contributions at household jobs, ranging from plumber to lawn mower to homework helper.
That's aside from bringing in a paycheck. Obviously, even if they're not the primary breadwinner, fathers have a huge financial impact on their families.
To gather some Father's Day wisdom from local financial professionals who also happen to be fathers we talked with Kelly Brothers, financial adviser with Genovese Burford & Brothers in Sacramento; Bruce Kajiwara, a CPA and certified financial planner with Financial Network in Sacramento; and Kevin Young, a CFP with Young Wealth Management in Davis.
Here's what they shared:
What dads often overlook
Too often, dads don't take stock of everyone who might become financially dependent on them, including aging parents or in-laws.
"The recession has made some financial plans go sideways. Not everyone's situation may be what they desired or intended," said Kajiwara. "If we review our financial goals and responsibilities, we may look at our current spending in a different light It's why we should all plan not just for the future, but for the unexpected as well."
To be prepared, "read the paper, do (your) Internet research, then cull what you think is the best advice and run it by a trusted adviser, friend or colleague, someone knowledgeable whose advice is trustworthy," he said.
"Get enough term life insurance to fund expenses until your youngest child is self-sufficient," said Young. For example, for a dad with two kids, ages 3 and 8, he recommends a 20-year term policy with enough death benefits "to pay for four years of college, plus your lost income for a period of time."
Brothers concurs. Term life insurance "is cheap and truly provides some peace of mind that your child's financial prospects won't be decimated if something happens to you."
He also recommends "layering" term insurance, buying an additional policy when a second child comes along.
Spouses, too, should be covered by life insurance.
"You have to force yourself to go there to actually imagine what would happen if a husband or wife was lost," said Brothers. "It is much more than just a single income. Most parents will want to spend more time with their kids to make up for the loss of the other parent. Plan for that and insure both partners adequately."
Save for college now
"It is powerful for a child to learn that Mom and Dad are saving for his or her college education," said Brothers. "And don't just open a 529 (college savings) plan; tell people you opened a plan. Grandparents, aunts and uncles should know there is an easy gift alternative for birthdays, etc. Most would rather put $100 into a college fund than spend money on clothes or toys."
Young advises parents to make paying for college a shared expense.
"Early on, children need to understand that paying for college should be a joint effort: i.e., tax-free savings, scholarships, student loans, pay-as-you-go, student work programs," he noted. "It's amazing how students who have 'skin in the game' graduate in four years with good grades."
Leave your wishes
Another essential: A will that designates guardians for your minor children, should something happen to you. Typically, that responsibility is entrusted to a close relative, said Young.
As an alternative, he said, a revocable living trust that names a trustee who can manage your kids' assets until they reach a certain age "is a better option than giving an 18-year-old access to their inheritance outright."
A trustee who oversees any inherited assets (a home, bank accounts, stocks, bonds) until your kids are, say, 25 years old "provides income for a (young adult) to fund an education, but also gives them time to mature and become a responsible individual."
Lessons to instill in kids
"It's not how much you make but how much you save," said Young, who has two sons, ages 8 and 12.
Kajiwara said he tries getting his three kids 26, 24 and 21 to embrace the concept of "creating wealth" specifically, the savings that will carry them through from college to retirement.
When his daughters graduated from college, Kajiwara's advice: "With your first job, you need to save 15 percent of your salary in your employer's 401(k)."
By setting up automatic payroll deductions over the last four years, Kajiwara said, his oldest daughter's savings are already adding up without her ever having to give them a thought. And she and her husband clearly "get it" when it comes to savings, having opened a separate account for buying their first house.
Kajiwara gives his kids the same advice he'd give a younger client: "Rely on yourself for your current and future financial well-being. Don't rely on your employer, the government (Social Security will be different by the time you reach retirement age) or your parents (an inheritance may not be there).
"The more your retirement is based on what you save and invest, the better position you'll be in," Kajiwara said.
Value of a dollar
Brothers, whose four children are 7 to 14, said he wants them to appreciate a dollar's value. Money doesn't automatically pop out of the ATM; it's earned by Mom or Dad. Every time lights are left on in a room, there's a corresponding cost on the SMUD or PG&E bill.
On family vacations, he gives each child a set amount of spending money at the trip's outset.
"Anything extra, whether it's a snow cone at the beach or a shark's tooth in a gift shop, they get to make the decision on how it's spent," said Brothers. "They also get to live with the consequences." When the spending money runs out, there's no wheedling any extra $5 or $10 out of Dad.
Despite lighthearted surveys that sketch out a dad's household duties along traditional lines, there is far more blending today of parents' roles. Many dads cook, clean or stay at home; many moms are full time in the outside workforce.
That's why all work should be valued, beyond just a paycheck, and not continually expressed to our kids as something we dread, noted Brothers.
"It's important that kids understand the basic concepts of money," said Young, including "the dangers of consumer debt, the importance of savings, the understanding that materialism and money do not provide happiness, and the importance of giving."
Aside from the financial basics this Father's Day, whether you have a dad or are one yourself, be sure to give and get a hug today.