Its never too early to protect your familys financial well-being. Most of us are so busy juggling work, raising a family, and attending to other commitments that we tend to shelve matters that may not be on our immediate radar screen. Very soon, we promise ourselves, we will take care of our finances. Unfortunately, everyday concerns tend to crowd out what is being accepted as essential planning. And then an emergency may strike, at which point it is already too late. Saving for the future is something that all of us recognize as necessary. It is the compromises we make today that will enable a secure tomorrow.
This is the advice that a very popular magazine had to offer-
If you know how much you are spending and on what, its easier to figure out whether you really need to spend this much at all. Once that realization sets in you are almost halfway into setting up your savings strategy.
Every month take out a small portion out of your income; its like paying yourself. The amount need not be much as long as its steady.
Most agree that retirement is one of the primary reasons for saving. Yet very few take advantage of the opportunities offered by employment based retirement plans. The Employee Provident Fund for instance, is a wonderful scheme to save, more than the minimum required if possible. The Employer contributes a matching amount, the rates of return are usually good and your savings grow without being taxed!
PROTECT YOUR FAMILY
A major illness or loss of your job could wipe out your financial reserves and put you back by several steps in your quest for financial security.
Insure yourself adequately, for health, disability and life.
PROTECT YOUR LEGACY
Almost everyone dies intestate, that is, without leaving a will. This is not only a gross negligence; it can cause avoidable heart burn. Mom would have wanted this is not something everyone may agree on.
If you die without leaving a will, the state will determine the distribution of assets, and the beneficiaries could end up paying a lot more in taxes.
Another important document you should execute is the Power of Attorney through which you authorize someone to take financial decisions and execute documents on your behalf. Imagine you are incapacitated in hospital, and cannot pay your bills even though you have money in the bank. The Power of Attorney will empower your spouse to operate your account.
One final word- get everyone in the family involved in the Family Protection plan. Your spouse and children should be aware of all the family assets and how they should be managed.
image courtesy of stuart miles