Are you financially prepared for the emergencies? How can you keep your family financially safe for the unexpected distress like job loss or a family emergency?
It is always tough to get your financial security in order but not impossible. Taking the proper steps can make the job easier and achievable.
Here you go:
Emergencies are cruel; every one of us experiences unexpected emergencies like a job loss, an accident, a major car repair, house improvement, etc. You should always be financially prepared to cope up with any emergency.
It is recommended to set aside a certain amount of money to build up a fat emergency fund. The amount could be $100 -$500 depending on your financial ability. You can automate your finance to save for the emergencies as well. Every month, when you get your salary, a certain amount will automatically get deposited into your emergency savings account.
Create a budget to know how much you can save for the emergency. Remember, budgeting is the first step for financial security. You can take advantage of online budgeting apps and tools to create and follow a budget with ease.
If building financial security for the family is your prime concern, then start paying off your debts. Make a debt repayment plan that goes with your new budget. If the debt amount is not huge, then you can pay it off on your own. Debt snowball and debt avalanche are useful ways to pay off debt without taking help of any debt relief company.
However, if the debt amount is scary and it is stealing your peace of mind, then you can seek professional help to get rid of it.
Credit counseling and other debt relief options are effective ways to get back to a healthy financial life. Thus, you can start afresh to build financial security for your family.
According to the National Safety Council, "73% of long-term disabilities are a result of an injury or illness that is not work-related and therefore wouldn’t qualify for Workers’ Compensation."
Life insurance is a must to financially protect your loved ones. You need auto insurance, homeowner's insurance, health insurance, life insurance, and disability insurance.
But you have to know how much insurance is enough. Use online life insurance needs calculator to get the idea of the amount you need for yourself and for the family members.
You need to make wise investments instead of taking unnecessary risk. Christine Larson, co-author of "The Family CFO" said, "You could be completely risk-averse with money you need for next year, but you can be a huge risk-taker with money you're saving for retirement.”
Talk to an investment expert or gain more knowledge to make wise investments. Thus, you can grow your money without inviting financial risk. Also, consider reviewing your investment regularly.
Do you think what happens to your family's finances after your death?
Your loved ones may feel insecure if something happens to you. So, start estate planning. Estate planning helps not only to divide the property but also protect the valuable estate. By doing this, you can secure your loved one's future.
Take help from an estate planning attorney to get advice. He will also suggest you how to take tax advantage in your estate planning.
Finally, inject financial lessons to your family members. It doesn’t make sense that only the bread earner will deal with all the financial responsibilities alone. Your family members have to understand their financial duties like writing checkbook, making ends meet, prioritizing expenses, following the family budget, and setting up emergency funds of their own.
How can you do it? It's easy.
Set examples, talk to them, create the budget together, ask your children to consider side hustle besides studies, and keep a family piggy bank.
This way, the whole family can understand the value of hard-earned money and the importance of financial security.