8 Financial Planning Tips To Protect Your Home And Family

A family is laughing while using a laptop at home to engage in financial planning.

Many people are accustomed to meeting their day-to-day financial obligations, but few have an idea of how to properly plan for their future financially. You’ve certainly heard of wealthy individuals who died and left their children suffering because of poor management.

Managing Your Finances

You don’t need to have a net worth amounting to millions of dollars for such predicaments to befall you. Your savings should be properly managed to secure your family’s future.

Here are eight financial planning tips to protect your home and family:

1. Seek The Advice Of A Financial Advisor

It’s not enough to know how to save money in the bank. If you’re after growing your capital that way, you might need to rethink your strategy. Saving accounts have one of the lowest interest rates in the investment world.

A reliable financial advisor can help you with incredible ideas on how to build your wealth including investments on:

  • Growth stock funds
  • Rental housing
  • Industry-specific index funds
  • Annuities
  • Peer-to-peer lending
  • Short-term corporate bond funds
  • High-yield money market accounts
  • Treasury securities
  • Dividend-paying stocks
  • Certificates of deposits
  • Government bond funds
  • Money market mutual funds

With the right financial investment plan, you and your family will have financial security for years to come, and an advisor would help you narrow down your options.

2. Draft A Will

You’ll be surprised to learn nearly three-quarters of American adults don’t have wills. In case you’re in this group, understanding no one knows until when you’ll live should compel you to create a will. Death can strike anytime, regardless of your health status, age, financial endowment, area of residence, or gender.

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It’s through a will you specify which son, daughter, or spouse of yours will inherit a given possession. It’d be a shortcoming on your part to leave your family fighting over your wealth or to allow your wealth to be distributed by a probate court judge.

Your will must be drafted in accordance with the laws and regulations of your state to reduce the risk of it being null and void after your demise. Looking for a law firm such as Mile High Estate Planning and other reputable ones can help you draft a legally binding will.

3. Set Up A Trust

There are many reasons why you should consider setting up a trust. Some of them are:

  • To avoid probate and therefore save time and legal fees
  • To help manage all your financial affairs in case you’re incapacitated
  • To eliminate family feuds when settling your estate
  • To help divide your assets among your beneficiaries in the fairest way possible
  • To reduce tax on your property
  • To have somebody maintain your estate on behalf of your children until they become of age

Setting up a trust fund is one of the best approaches in managing assets since professionals are there to guide you. They would ensure your finances are properly monitored.

4. Grow An Emergency Fund

Nobody’s sure about tomorrow as life is full of uncertainties. Even people with stable jobs in their industry have been laid off and left unemployed. Therefore, while you’re still on payroll, don’t spend all the money you get. Learn to set aside some cash every month to help you meet your expenses when there’ll be no income coming your way. 

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Experts suggest setting aside about six months of salary, but take it as mere average. Think of going beyond this to even twelve to eighteen months salary in case of multiple emergencies. Even if you suffer extended unemployment in the future, you and your family will less likely run out of food and other necessities.

5. Get A Comprehensive Home Insurance Plan

Having a roof above your heads is one of the most important basic needs, second to food and clothing. As such, you need to assure your family they’ll always have a place they can call home, and it doesn’t stop with building or buying a nice house. 

Incidents like fire and robbery can make your loved ones homeless in the spur of the moment. Foresee such eventualities and show you care for your family by investing in a home insurance plan.

A family standing in front of their home, with a focus on financial planning.

6. Get A Life Insurance Plan

In addition to a home insurance policy, consider getting a life insurance plan. Your financial dependents will greatly benefit in case of your premature demise. They’ll be able to comfortably pay their home bills and also fund their education without fear of being unprovided.

A good goal for life insurance is 10 times your annual income. That should be enough to support your family until they’re able to fend for themselves.

7. Regularly Check Your Beneficiaries

Understand your will doesn’t dictate who’d inherit your assets. Consider your retirement benefits and life insurance policies. Do you remember who you specified as the beneficiary?

Perhaps you started your job while you’re still a youth and penned your college sweetheart’s name. However, you ended up marrying a different person. It’d be unfortunate for such benefits to go to your college crush, yet you long ago forgot about them. Consider updating beneficiary information on all relevant documents now and then.

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8. Instill Financial Responsibility In Your Children

You’re greatly educated on matters of wealth that’s why your family stands up to this point. But what about your children—do they know what budgeting is? Do they know the principles of saving? Do they understand the real value of money? Are they socially responsible?

It’d be disheartening to posthumously learn your children squandered the wealth you took a lifetime to accumulate in a matter of weeks. Therefore, start as early as now in teaching them money management skills. It’ll help them for years to come as they become adults and grow a family of their own.

In Summary

Your family’s current and future financial stability is in your hands. By making the right choices now, you can forever protect your home and family from financial woes. It’s never too early to start wiser decisions financially to ensure a secure tomorrow.

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