The Five-Point Financial Planning Checklist For Your Family
When you’re just beginning your family, say getting married or having your first child, you should take stock of your finances and a few steps towards making some concrete financial plans. As your family grows and you get busy with life and work, financial planning can take a backseat. However, this is the time when you should aggressively save and invest for the growing needs of your family. Anyone who is a dependent on you should be covered, be it your spouse, your children or your parents. They should have enough financial resources to deal with any emergency or situation in life, and they also should have enough to lead a decent life, in case something happens to you.
This article outlines five things you can include in your financial planning to secure your family’s financial future.
1. Build an Emergency Fund
You have probably heard the phrase "Emergencies don't knock". So, you might as well prepare for it. For instance, you may lose your job, which may leave you without any income for some time. There may be a health crisis that befalls you or one of your family members. If you have ageing parents, there’s a possibility that they may have a healthcare emergency, which is not covered by their insurance policies. You should have an emergency fund you can dip into in such situations. You may want to avoid using your savings for an emergency. This can leave you financially drained.
2. Get Comprehensive Life Insurance
The first thing you should do to protect your family financially is get life insurance. A whole life insurance policy will ensure that your family members get a financial lump sum if you lose your life in an unfortunate turn of events. If your spouse is not employed, the money can give your family some runway to get back on their feet. It can be a buffer for your children’s future needs, including education and marriage. If your parents are dependent on you, make sure to include them as beneficiaries, so they are protected as well.
3. Get Add On Health Insurance
Getting health insurance is a crucial element of financial planning. You should get health insurance not just for yourself but for all family members. Check with your insurance provider if you can add your children to your health plan. If your parents do not have health covers, buy one for them. If everyone has a health insurance plan, it will come in handy during a medical emergency.
4. Invest in a Retirement Fund
Looking out for your family means looking out for yourself too. If you’re too busy tending to other people’s needs, you may ignore your own. One of the most important financial goals is to save for your retirement. Invest in an annuity, a pension fund or an NPS account to secure your old age. Your retirement funds can also be a good backup for your spouse and prevent you from being a financial burden on your children.
5. Make a Will
Nobody thinks about drafting a will as a top priority. Despite the fact that you may believe naming your assets and investments will suffice, a will would be more convenient for all your family members. To avoid a possible family feud, you should draft a will that clearly identifies who will receive your finances. If you have any sizeable assets, you should consider mentioning the exact proportion in which you want your family members to get ownership of them. This will make asset distribution easy if something were to happen to you.
Taking care of a growing family entails a lot of responsibility. You can tackle this responsibly by doing financial planning that involves making the right investments and buying financial products that safeguard your family’s financial future.
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