Nobody can predict the future; we must experience it for ourselves. Many have attempted to do so in the past, but there were only a handful of accurate estimates. On the other hand, the Bible forbids even sincere believers from making predictions about the timing of judgment day. The Mayans tried to, but that wasn’t accurate, was it?
However, this doesn’t mean we don’t have control over our destinies. The same is the case regarding ensuring a bright future for our families. We have complete control over it, and with the proper steps, we can ensure that our families live a long and prosperous life long after we’re gone.
So, with that in mind, here are some tips to ensure your family has a bright and comfortable future.
1. Document Everything
Ensure that you document all of your decisions. This includes information about your insurance coverage and preferred funeral arrangements. Doing so eliminates ambiguity and ensures that everyone in the family knows your desires.
Furthermore, make a power of attorney so that your medical and end-of-life decisions can be taken care of. Keep all of these important documents together. Inform your partner or grown children of where this documentation is so they can find it when needed.
2. Hire an Estate Planner
Hiring an estate planning attorney is probably one of the best decisions to ensure your family stays financially secure after you pass away. Tell your lawyer whatever assets and property you want to bestow on chosen family members.
By doing this, your loved ones won’t have to deal with dividing up your possessions after your death and can concentrate on the grieving process, which will probably be incredibly difficult. If appropriate, you can also give specific family members, such as your daughter, son, or spouse, the authority to manage your finances, property, and business in the manner you choose.
3. Invest in Your Children
Spending time on your relationship with your children is crucial, even though you may be preoccupied with building a profession for yourself and ensuring you have enough money to support your family.
So, set some time each week to spend with your children, whether through an activity you enjoy or just checking in with them over breakfast or dinner. Ultimately, making these plans in advance demonstrates to your kids that they are essential to you, which could benefit both the present and future.
4. Pay Off Debts
If your family is required to pay off your obligations in the event of your untimely death, this can financially strain them. Your loan repayments would consume every bit of the financial security you would have provided for your family, leaving them with nothing. So, try to pay off your debts as quickly as you can. Debts are liabilities. Thus, the less you owe, the more financially secure your family will be.
Prioritize paying off your bad debts before your good debts, such as personal and credit card debt, before your good debts, like mortgages and student loans, which have higher interest rates and no additional tax benefits.
5. Purchase a House
Nothing provides more financial security for your family than a place they can call “home.” So, invest in a home after completing your short-term financial objectives. It will be a valuable asset for you and your family once you’re gone.
However, keep in mind that home loans also provide an additional tax benefit. So, don’t forget to use a Loan Protect Plan to protect your home loan if you choose one.
6. Educate Your Family About Your Finances
Most of the time, your family does not reap the rewards despite investing in insurance-related products. Or simply because you don’t tell your family members about your financial portfolio creation or insurance purchases. They are ignorant or don’t know how to. Therefore, your family members cannot manage your money when you are absent or otherwise ill.
So, explain to them how to file a claim under your insurance coverage. Also, let them know about your investments so they can use them if you cannot. Lastly, don’t forget to include the nominee’s information as well.
7. Create an Emergency Fund
In addition to disease and premature death, other unforeseen events could occur in your life. In fact, various other unforeseen financial circumstances also call for money. For instance, how would you pay for your family’s expenditures while you wait for new employment opportunities? In such cases, creating an emergency fund will help you tackle financial issues, especially if you’re unemployed.
So, start saving now and grow your emergency fund. According to various financial experts, your emergency fund should contain at least six months’ salary. However, this can change according to your lifestyle and expenditure. So, choose an amount that works for you!
8. Set Financial Goals
Spend time examining your current financial condition, including your income, assets, debt, and living expenses, and contrasting it with your expectations for your family’s future. Ask yourself, is there a certain amount you want to save for your children’s future based on where you are now and where you want to be? If yes, decide on a goal and the route you’ll take to achieve this.
9. Prioritize Your Needs First
Contrary to popular belief, putting your needs first is the most crucial step you can take to safeguard your family’s financial future. This includes making retirement plans and lowering debt, especially home debt. If you don’t, your family will have to pay the price after you’ve passed away.
After all, it’s unlikely that the amount you lose in interest on debts will be offset by whatever income you earn on savings.
As you can see, there is a lot you can do to ensure that your family’s future will be secure long after your kick the bucket. Ultimately, all issues will be resolved if there is comfort, stability, and a plan B for the worst-case circumstances.
Of course, some family conversations might be difficult to start, especially ones related to your finances. However, talking early on and making plans to be debt-free is something your children will enjoy when you pass away!