Building Financial Security For The Ones You Love Most

Written by: Chris Graham l Advisory Team

 

In this article, we are going to talk about how you can start building financial security for the people you love the most, your family.  If you have a family, one of your greatest financial fears is most likely the thought of not being able to provide for them.  We all have plans to take family vacations and buy our forever home, but at the end of the day what we are really after is the ability to take care of our family.  For many of us, financial security is our greatest priority.  Financial security is important to us because it gives us the reassurance that no matter what, our family will have the financial resources they need to go about their daily lives.

Let’s discuss the key steps that you can take to start building the financial security your family deserves.  The path towards achieving financial security can be difficult.  Financial security is not the most uplifting or enjoyable of personal finance topics.  That is why most people do their best to avoid these difficult conversations all together.  However, if you follow some of these steps you could be on your way to placing your family in a much better financial position in the future.

Financial Goals To Establish An Emergency Fund!

Life is unpredictable and you never know what might come your way, or what that unexpected event might cost.  That is why it is so important to have cash available in the event of an emergency.

Establishing an emergency fund is an easy way to make sure that regardless of what is thrown your way, you can deal with it immediately and stop it from becoming a financial emergency for you and your family.  This is why most people refer to this type of account as an emergency fund.  You can start to build an emergency fund for your family with a small deposit.  If possible, starting with at least $1,000 would provide your family with a buffer to handle most one-off unforeseen expenses.  It does not matter if you can’t start off with this amount.

What is important is that you build this up over time.  After a while, you might be able to build this up to a point where you have three to six months’ worth of living expenses saved in your emergency fund.  This is a significant milestone as it will help you and your family get through more difficult periods such as unemployment or a medical emergency.  It is important that these funds are readily accessible and safe.

Organise Your Estate Planning!

Estate planning may be the least enjoyable of personal finance topics for most people.  However, proper estate planning is vital as it ensures that your family is cared for both financially and physically if you die.

The most important aspects of a good estate plan include establishing a will, reviewing and nominating beneficiaries and establishing a power of attorney.  Establishing a will is by far one of the most important things that you can do.  It is important to establish a will even if you do not have any money to pass on, because a will allows you to name guardians for your children.

Reviewing and nominating beneficiaries on your accounts is also important.  Beneficiaries are the people who will inherit your money if you die.  It is important to check the beneficiaries nominated for your superannuation to ensure they are up to date.  These nominations should always be kept up to date and align with your estate planning wishes.

You should also consider establishing a power of attorney. This nominates someone to make decisions on your behalf in case you are not able to.

So how do you get these things in place? You can meet with an Estate Planning Lawyer here at Canny Group who can walk you through the process and help you to get your estate planning affairs in order.

Review Your Life Insurance!

The purpose of life insurance is to make sure that the people you love and who are financially dependent on you have all the money they need to provide for themselves, no matter what.

If you are a working parent, this might mean having enough life insurance to replace the income your family depends on.  If you are a stay-at-home parent, this might mean providing the resources needed to replace all of the care you provide for your family.  Life insurance can also be used to pay off debt, pay off your mortgage, or fund your children’s education.

Review Your Income Protection Insurance!

If you are in your 20s, 30s, or 40s, your greatest financial asset is most likely your ability to earn an income now and in the future.

It is your income that is going to pay your bills, pay off your debt and allow you to save for your family’s future.  Unfortunately, there’s a high probability that at some point a medical issue will prevent you from earning this income for at least a period of time, if not permanently.

According to WebMD, there is about a 33% chance of you becoming disabled at some point before you retire.  Interestingly, the leading causes of disability are probably not what you would think. The most common causes are conditions such as arthritis, back pain, heart disease, cancer and depression.  This is where income protection insurance comes in.

If health issues keep you from working for an extended period of time, your income protection insurance will replace some of your income, often for years or even until you are 65 years old if necessary.  This money from your income protection insurance would allow you to keep paying your bills and keep saving, even if you are not able to work due to illness or injury.  However, there are a few variables when it comes to income protection and it can be complicated.

Canny Advisory + Our Financial Advisory Services

If you need help with reviewing your personal insurance needs, including Death, TPD, Income Protection and Trauma cover, you can arrange an appointment with a Financial Adviser here at Canny Group who can help you with your personal insurance needs as part of a holistic financial plan.

We know that financial security is not the most exciting of personal finance topics, but if you handle it right, you can ensure that your family will always have the financial resources they need.  It is one of the best and most selfless ways you can let your family know how much you love them.