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Balancing fatherhood and finances: AI vs financial advisers

One of the stressors for new dads is the explosive increase in financial responsibilities.

Becoming a father is a significant milestone, often filled with excitement and joy. But for many, it can also be filled with fear and anxiety.

One of the stressors for new dads is the explosive increase in financial responsibilities. According to Mike Cloete from Momentum Financial Planning, raising a child in South Africa can cost around R90 000 to R120 000 per year and that estimate is likely to increase annually as inflation rises and the economy changes.

“First-time parents in particular can expect to see a big influx in expenses for 12 months after the child’s birth.

“And once they start going to school, there is an even bigger jump. It pays to be prepared.”

Notably, the Momentum Unisa Household Financial Wellness Index revealed that there was an increase in the number of financially distressed households from 2021 to 2022, which is due to high consumer price inflation, strong rising interest rates and moderate salary increases.

Additionally, a report by Stats SA found that a significant number of children are born into low-income homes, further highlighting the crucial need for financial planning. Mike says successfully navigating the financial future of a growing family can be challenging.

However, in today’s digital age, new dads can make use of online tools and resources as they can provide valuable insights and guidance, but he/she advises to proceed with caution.

“AI tools like Chat GPT can offer basic financial insights, provide general advice, answer questions about budgeting, and even simulate different financial scenarios.

“However, it’s crucial to recognise the limitations of AI when it comes to financial planning,” Mike says.

While AI can be a useful starting point, he/she says parents should not rely too heavily on AI when making critical financial decisions.

Financial planning is dependent on several variables. AI cannot consider the nuances of your unique financial situation, family dynamics, and long-term goals.

Mike says this is where a financial adviser remains invaluable and your best bet at shaping your financial future.

“A financial adviser can provide personalised advice tailored to your family’s specific needs.

“They can help you create a comprehensive financial plan that takes into account all aspects of your life, from current expenses to future aspirations.

“Unlike AI, a financial adviser can offer tailored investment strategies, provide insights based on market trends and help you navigate complex financial products,” he says.

He says fatherhood comes with its challenges, but financial planning doesn’t have to be one of them.

Consulting a financial adviser allows you to confidently secure your family’s financial future, ensuring that you can focus on what truly matters – enjoying the precious moments of fatherhood without the weight of financial uncertainty.

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