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A question I see often is this:
“How do I protect the family finances?”
When we’re young, we’re selfish. We spend our money on ourselves.
We might make important investments in our future, like spending money on higher education, but we do it without thinking of anyone else.
Why should we?
We’ve got no responsibilities and commitments, and our money is our own. It’s often not until we have children and settle down that we start to consider other people.
Even then, to start with we’re just worried about getting through every day. We don’t concern ourselves with the future when we’re so busy looking after young children. We focus on eating, sleeping and enjoying our new families.
But, at some point, it’s vital that you start to think about both your personal and family finances.
Managing Family Finances: An Introduction
You can’t possibly predict what the future that your children will inhabit will look like. You can’t know what their lives will be.
You’ve got no way to know what kind of jobs they might have or how much money they are likely to have in the bank. Nor can you predict what your own life might look like.
We all expect that we’ll stay fit and healthy well into old age, that we’ll be able to work up until our retirement and that we’ll have plenty of money to take care of ourselves when the time comes.
These expectations, unfortunately, can come to nothing.
You never know when you’ll need your family to start looking after you. So, it’s essential that you start taking steps today to protect your family finances now.
Buy a House
One of the best ways to protect yours and your family’s futures is to buy a house.
Many of us are now long-term renters. We rent until long after we’ve had children, and then find ourselves struggling to get approved for a mortgage because we’re too close to retirement.
Failing to buy a house means that you’ll always be shelling out a large portion of your income on rent. When you’ve got children, or you are trying to live on a pension, this is something that you can’t afford to do.
Buying a home means that you’ll have a more comfortable retirement, you’ll always have financial options, and you’ll have something to leave your children when you’ve gone or something that they can sell to pay for your car.
Get Life Insurance
You might be amazed at how many parents don’t have life insurance policies and those that do don’t have anywhere near enough.
If you want to protect your family finances, the first thing that you should do is take out an insurance policy, making sure you get the correct amount of coverage.
You should also research Charlotte Bail Bonds, LLC to protect your finances if any of your family get into trouble, as well as home insurance and appropriate cover for any significant expenses.
Save for Your Retirement
When we’re younger, retirement seems a million miles away.
But, if you are going into your 30’s having not bought a home or started preparing for the future, you might find that you’re not in the position to start actively saving for your retirement for a long time.
Whenever you can save, it’s crucial that you do. Either with a high-interest savings account or a private pension scheme.
Don’t rely on state pensions, as they are unlikely to be able to support the lifestyle that you are accustomed to, which might mean that you have to rely on your family for help.
Invest in Their Education
When your children are young, it can seem as though their education is mapped out for them.
They start school, they stay there until they graduate, and then they consider going on to college or university. But, it’s a good idea to be more involved in the whole process.
At some point, you might want to invest money ensuring they go to a good school without them getting into vast amounts of debt before they’ve even started their working life.
But, it’s not just money that you should invest. You should also invest your time.
As soon as they start school, get involved.
Volunteer to help our when you can, read with them every day, even when they are too young to understand, help them with their homework, be there for them when they need to talk about school stresses.
Invest as much as you can, and they’ll develop a love of learning which will help them more than you can imagine.
Write a Will
So many of us don’t.
We use the excuse that we don’t have anything to leave anyone. But, you do.
Your will isn’t just about money and property. You can use it to decide what will happen to your children if they are still young when you die, and also to specify any end of life care that you might want.
Writing a will now can protect your family finances and their future, while also making their lives much easier should the worst happen.
Assign Power of Attorney
What would happen if you suddenly found yourself:
- Unable to make your own decisions?
- Unable to look after your own paperwork?
- Unable to make decisions about your health care and unable to decide what to do with your property or finances?
Assigning power of attorney to someone that you trust, gives them the right to make these decisions on your behalf. Your next of kin might be the obvious choice, but it’s not always the right one.
Think about this carefully and choose the person that you trust to make sensible and informed decisions on your behalf.
Keep Updating Your Policies
Writing a will and taking out insurance policies is fantastic.
But, your situation won’t remain the same for the rest of your life.
At some point, you might need to update your levels of cover or change your beneficiaries.
Take the time to update things when you need to.