We can all agree that the future is unpredictable and uncertain. But, even if we cannot anticipate it, we can still plan for its stability. The first step toward a brighter future is to get our finances in order. Furthermore, if we take the necessary procedures and legal strategies to guarantee our family's financial future, we will be able to create a better future for them.
Assess your current budget and expenses
The first step toward financial security is to assess your current expenses and the budget. That will set the ground for your full-on planning mode in Excell or Google Sheet. Simple math will help you realise areas where you can save up and how to budget for the future. Simply put, organise your budget per urgent and non-urgent expenses to figure out how you can save up in the future. Know your regular monthly expenses like mortgage, bills, food, and organise your budget around those you simply cannot avoid.
Work on setting up an emergency fund
What would you do if you had sudden financial expenses? Would you sigh with relief knowing you have savings, or would you go straight into panic mode? Many people don't have a financial plan B in case of unforeseen events. That's why you should work on building an emergency fund that can support your family for up to six months and cover the living expenses.
Think about life insurance
Life insurance is a great financial investment, and it's a way for you to protect your family members. That is a long-term investment that is worth considering. Firstly, figure out how life insurance fits into your monthly budget. Next, seek out as many pieces of information you can find on your own. There are many online calculators you can try to figure out the financial part. Then, approach a few insurance agencies so that you can compare their offer and go for the most suitable one. If anything unexpected happens, your life insurance cover will safeguard your family.
Reduce or eliminate debt
If you can eliminate your debt, make it your priority. If it’s not financially feasible, at least try to reduce it. The best way to reduce your monthly debt is to not take one credit after the other. Make sure you’re consistent with your payments to keep up a good credit score. Try not to get into excessive loans and live way above your means if you want to reduce debt. Your ultimate goal is to spend as little as possible on monthly payments if you want to save and plan for a brighter financial future.
Make a plan and seek legal advice
When you make a list of the things you want to include in your family financial strategy, you'll want to discuss each item with a legal professional. Even if you're just curious about all the available options, seek the advice of Doolan Wagner Family Lawyers and similar experts on the subject matter. Family lawyers will give you invaluable pieces of advice and will guide you in the right direction.
Appoint a legal guardian
Even though thinking in terms of the worst things that can happen is not good for our mental health, sometimes we have to. Especially if you have young children or you work at high-risk jobs like in the mining industry and other high-risk industries. Who would you like to take care of your children in case the worst scenario happened? Even though it’s a difficult thought, you only have to think about this once and appoint a legal guardian. This person will be legally obliged to take care of your children if something bad happened. Think about this as the right way of doing things because you always want what is best for your family.
Establish a trust
A trust is another legal step you can take to provide for your family. It’s a great way to distribute your wealth the way you deem rightful. It’s an investment into your child’s future because he or she will have to be at a certain age before they can access it. You can also put other rules and regulations in place and define how the trust will be used.
But, you have to be aware that establishing trust and operating it for the years to come requires certain fees and expenses. Also, it would be great to teach your child how to be financially responsible from an early age. This way you’ll do what you can to prepare your child for their large inheritance that will be available at the legal age of 21.
Have an estate plan
One of the reasons you should seek legal advice from a professional is to sort out your estate plan. This concept covers everything from your will to power of attorney and other legal matters. The fact that we won't live forever is strong enough to persuade you to take these steps even if you're in your thirties. It's always best to secure the future of your family as early as possible then to leave them without a will and secure future.
Protecting the financial future of your family is not as difficult as one might think. It needs some planning and taking the right steps like the ones we’ve covered.
Alison Pearson is an interior design student. She is a writer and designer, and her ultimate passion is art and architecture. She is also a bibliophile and her favourite book is "The Sound and the Fury" by William Faulkner. Follow her on Twitter.