When you have a family, you know how important financial security is. Money is a major source of stress for people, but it doesn’t have to be a constant burden or worry in the back of your mind. With these strategies, you can protect your family’s finances and grow your wealth in the process.
Create an End-of-Life Checklist
From your children’s welfare to your assets, estate planning is one of the most effective strategies that can protect your wealth. While discussing the end of your life or another worst-case scenario isn’t pleasant, not thinking ahead can have serious conversations. Without taking precautions, you risk leaving your loved ones shouldered with financial burdens and confusion.
Decisions about how to handle your end-of-life care or urgent medical decisions can lead to feuds, and families might dissolve into chaos and strife without any formal instructions. Take all the guesswork out of the equation by planning your estate while you’re in good health. This brings everyone peace of mind and ensures you will be able to protect your family’s finances no matter what.
You can make a checklist of final wishes in the event you are ever too sick or injured to voice your wants. You can review an end-of-life checklist online that helps you get your affairs in order and guide loved ones if you’re ever incapacitated. This type of checklist covers things such as documenting your assets, appointing legal guardians for dependents and assign a power of attorney for your finances. You can also make arrangements for any housing arrangements required after a severe injury or during palliative care. Having a guide on what to do for you can make the stress of caregiving easier on your loved ones.
Separate Your Bank Accounts
Having all your money in one place might seem like a good idea, but you might actually be keeping too much cash in the bank, and it can lead to a lot of confusion and mismanagement if someone is unable to organize them in an emergency. A general savings account should be set up with automatic withdrawals to ensure there is always a safety net in place. Generally speaking, you should aim to have at least three months of bills put away. This savings account is not for recreational purposes, vacations or anything else. It should be treated like an essential expense and kept only for real emergencies.
Investments for children’s college savings should be placed in a custodial 529 savings account. Any other money you would want your dependent to inherit should be placed in a secure Uniform Transfer to Minors Act (UTMA) account, which minors gain access to when they turn 18 or 21. The age of majority is determined by your state.
Set a Spending Limit Every Month
If your family is fortunate enough to have liberal income, then you may not think twice about buying whatever you want. This can result in wasteful spending that dwindles your wealth and stagnates your net worth. Avoid spending money just because you can. Teach children to set goals, work toward them systematically and save as they earn.
Having a monthly budget regardless of your income keeps your family secure. You might be surprised how much you can save on groceries, take out coffee, and other regular occurrences through the process of budgeting. Budgeting is relative to your income, not solely for people who are not able to spend. In fact, people with a greater amount of discretionary income can benefit even more from limits and a budgeting course.
