As a Savvy Daddy, protecting your family is your top priority. And part of that protection includes financial security. But with the uncertain economy, rising costs of necessities like gas and food and fewer jobs available every year, how do you help to make sure that you and your family are financially prepared for the future? Instead, here are some realistic and logical steps to take to help you prepare for your family’s financial future.
- Purchase Life Insurance Now. We always hear about the importance of life insurance, but many fathers do not take the necessity of life insurance seriously. In fact, according to one report by the National Association of Insurance Commissioners, fewer than half of the young families in the United States have a life insurance policy on either spouse that they bought themselves. The question is: Why are so many fathers afraid of planning for a tragic uncertainty that could leave their family without the money they need for basic necessities? A proper life insurance policy will help your family pay the mortgage, pay college expenses, pay living expenses and cover the costs of the funeral and burial. The best part is that you can usually get a sizable policy for only a few hundred dollars a year. Why hesitate on buying a comprehensive life insurance policy and risk having these extra burdens put on your wife and children after you are gone? Learn the difference between term and perm insurance - one is not better than the other. But one is better than the other for you.
- Have a Will in place. I love this topic almost as much as I love the New York Yankees. But you gotta face it. If you have a family, you need a will. Period. You could outlive all of your kids and live to be 99 or you could trip over the curb after work tomorrow and get hit by a bus. Death is inevitable and the only uncertainty about death is when it’s going to happen (now that will put a smile on your face, won’t it?). There is nothing wrong with having a will, but facing the fact that you are not immortal may be the most difficult part about the process. A will not only helps the distribution of assets according to your wishes easier, but it also protects your wife and your kids and helps to ensure that they gets all of your assets. It's easy to do - get it done.
- Prepare a Family Budget. Are you living without a written budget right now? If so, you probably don’t know where all of your money is going each month. But a written budget will help you determine where every dollar goes so you can see where you are spending money unnecessarily. Be sure to “spend your money before you get it,” meaning write down where every dollar should go at the beginning of the month so you can see what you should have left over once the month is over. Then you can decide where the leftover money goes at the end of the month. Check out this previous Savvy Daddy article on how to prepare a family budget well.
- Teach Your Kids about Money. This down economy is actually the perfect time to do this. In our society of instant gratification and using credit to live beyond your means, our kids are growing up without learning the valuable lessons about how to manage their money responsibly. By teaching them about money at a young age, they start learning how to save their money, work for their money and spend only the money that they have. Then when it comes time to go to college, move out or get a job, they will appreciate the value of a dollar and be more savvy with the money that they earn.
- Eliminate Debt as Soon as Possible. If your family has a large amount of debt, it could be holding you back from obtaining a secure financial future. Debts will loom over you and your finances like a black cloud that just continues to grow and grow. Credit cards, student loans, medical bills and other debts can reduce the amount of money you can put towards retirement and financial security. But in addition to the debt is the interest that many of those debts are incurring. It could take you decades to pay off a moderate debt simply because of the interest rates if you are not motivated and aggressive about paying it off! Make a few financial sacrifices today (cable, going to the movies, going to restaurants, etc.) and put that money toward your debts so you can start building up your savings and building toward financial security today.