7 Financial Tips for Fathers

More masculine ways to handle money

I’ve recently been contacted by a lot of men whose marriages are struggling due to financial difficulties. It’s the fourth most common reason for divorce.

So here are 7 practical tips for men looking to avoid getting into this situation. They all focus on spending less rather than earning more because the hard truth is that unless you learn to control your expenditure you’ll end up with financial difficulties even if your income increases massively. Most lottery winners go broke within a few years because they have the spending power of wealthy people but not the financial habits that create wealth.

These tips aren’t fancy or easy, but they work. And living like this will force you to develop virtue.

1. Most people waste far too much money on cars. Cars are liabilities, not assets. The total cost of your car and all expenses related to it should be no more than 10% of your gross yearly income. If it’s more, downgrade it. Ideally, pay cash for a car that’s 3-5 years old and costs no more than 20% of your gross yearly income. A lot of modern cars will do 200,000 miles, and some will do many more. Save your money.

2. Clear all your credit cards each month. If you can’t do this, you can’t afford whatever you’re buying with them. And if your wife struggles to adhere to this, she shouldn’t have a card at all. Start paying for everything in cash instead.

3. You don’t actually need most of what you buy. It’s probably not going to make you happy, and it won’t appreciate in value either. Remind yourself of this before buying anything.

4. Don’t buy stuff to impress other people because you think it makes you look wealthy. This is especially true for designer clothing. People don’t notice you, think about you or care about you anywhere near as much as you imagine they do. So don’t waste money on appearing rich.

5. Save and invest ~20% of your income to become rich. If you can afford to invest more than this, you probably should do if becoming wealthy is a high priority for you. Index funds allow you to just set and forget it. Play the long game, and you’ll win.

6. Your rent should be no more than 30% of your gross income. And if you own your home, all your housing-related payments (mortgage, insurance, maintenance, etc.) should be no more than 30% of your net income.

7. Track all of your expenditure. Everything. Most people live beyond their means and are totally out of touch with their financial reality, but the only way you get wealthy is by living well within your means consistently for decades.

If you do everything above, you’ll have amazing financial defence. To get better offence, increase your income. Find a high-ROI skill that you’re good at then become great at it. Here are some examples: graphic design, videography, copywriting, social media marketing, web design.