Every parent has certain roles to fulfill and can vary in each household. Depending on their income-generating arrangements, some families have both parents sharing the financial responsibilities, while others have a single financial provider and one parent staying home. The latter setup can happen for a variety of reasons such as a job loss, having a chronic illness, or the personal choice to be the primary caregiver to their young children. Even so, being a stay-at-home parent doesn’t mean they can no longer financially contribute to their household, especially now that there are different options available to enhance one’s wealth and secure their family’s future.
In particular, investing in cryptocurrency is a new and popular way for stay-at-home dads to make extra money. For instance, for dads that prefer to trade in privacy coins like Monero, they can make digital transactions through their Monero wallet to improve their family’s financial status. Alternatively, some stay-at-home dads opt for the conventional route of investing in stocks and bonds.
Whether you believe in traditional investments or are willing to try new means to earn while being a stay-at-home dad, make sure to take a look at these investing tips when exploring your financial options.
Manage Your Debts
Before you consider investing, make sure your current income is sufficient enough to handle your debts. In reality, debts are common and not necessarily a bad thing. Perhaps, you’re paying off a student loan or your home’s mortgage. It can also be credit card debts from past purchases or car payments. Whatever the case may be, consider your monthly cash flow and how much you need to set aside to settle your debts.
As long as you’ll still be able to pay your debts on time and in full, then there’s no issue with putting your extra money into investment assets. If your investments can yield more than the interest of your debts, then it will be a wise move to invest.
For instance, if you’re paying three percent interest on your debts and the investment will provide at least six percent of your earnings, then it’s a good idea to invest as you’ll earn more than what you need to pay for your debts. In this arrangement, what you earn can help fund your household’s expenses and reduce your partner’s financial contributions.
Review Traditional Investment Options
To ensure you make informed financial decisions, brush up on your investment knowledge. You can start with the conventional ways to save and invest such as in stocks and bonds.
When you choose to invest in stocks, you’ll be purchasing or selling an ownership interest in a publicly traded company. This is one of the most popular forms of investment and has been proven to provide excellent returns to investors. Investing in stocks also comes with risks as stock prices can fluctuate due to different reasons like a volatile market or a company-specific crisis. As such, many experienced investors pay close attention to the stock market and would change their stock ownership often to protect their investments.
On the other hand, investing in bonds is generally safer than stocks. Bonds are securities issued by governments or corporations to raise funds. In exchange for lending your money to them, the institutions return your investment along with an additional amount of interest at an agreed-upon period. While they provide an assurance you’ll earn something after some time, bonds offer smaller returns than stocks.
Get Insurance
When investing your money, remember to take care of your family first. This includes getting life and disability insurance for the household’s primary earner so that the family continues to be supported in case something happens to them. If they already have ample insurance coverage, consider getting one for yourself. It’s best to find an insurance policy that has a 15-year term and will produce eight to ten times your household’s annual income so your family is provided for should there be an untimely death. Also, the insurance must be able to replace your contributions as a stay-at-home dad running the household. Remember, there are costs associated with managing a household and the related tasks will need to be outsourced if you can’t do them anymore.
Additionally, many life insurances have an investment component in them that you can take advantage of. Most life insurance policies have an equivalent cash value that you can borrow. This can be handy in different instances like when you need to fund home repairs or cover medical costs. On the other hand, some insurance products offer mutual funds that let the insurance company invest part of your money in return for earnings or other rewards. This is another option you may want to consider if you’re looking for investment opportunities.
Set Aside an Emergency Fund
Putting your extra money into an investment is an effective way to enhance your wealth. However, you need to think about saving something for a rainy day. It means holding off on hobby-related purchases when you have the extra cash and saving it instead. So, you have the funds to spend in case you encounter unplanned expenses such as a major car or home repairs.
As a guide, save money that’s sufficient to cover three to six months’ worth of expenses and place them in an easily accessible account. Setting aside such an amount is a good backup if the household’s primary earner becomes unemployed. In such a situation, the savings can help support the household’s essential needs during a period of uncertainty without scrambling to look for other sources of income or making drastic cuts in spending.
If you’re a stay-at-home dad, you can continue earning and improving your family’s financial status through different investment opportunities. However, you must understand that each investment has certain risks and returns. That’s why it’s best to go through these tips so you can make informed choices that will secure your family’s financial future. In case you’re uncertain about the best investment to put your money in, it’s best to seek the advice of experienced investors and financial experts.