Most people are looking for ways to make their money grow and secure their families financial futures, but it isn’t simply about the acquisition of money; it is about making it go further. After all, life is full of surprises, and there are many unexpected expenses that you could encounter, from accidents to repairs to just general misfortune.
The key is to try and prepare for these events so that your finances don’t take as much of a hit from them, but how? Below you will find a few different ways to help protect your family’s finances.
Lifestyle
Luxuries make life worth living for some people; however, most of us do have some sort of dependence on those little added extras such as takeaways and streaming services. However, most people often forget that becoming accustomed to a particular lifestyle can make it much harder to adjust if something were to happen. It may not feel like you’re living beyond your means, but if something affected your finances, would you be able to continue with the lifestyle that you enjoy? If the answer is no, then that could mean that your finances are overextended.
If you were to introduce small changes now, they wouldn’t be too noticeable, but they would lessen your financial burden and help to protect your future. These changes can be simple and gradual, trim the fat and cut out or cut back on unnecessary expenses. That isn’t to say you can’t enjoy your hard-earned money but be smart with it. For example, instead of having a takeaway once a week, why not cut back to once a month. Or think about how much use you get out of the things you have subscriptions to and maybe consider getting rid of the ones you don’t use often. Streamlining your expenses and considering your lifestyle is an easy way to begin the process of planning for your family’s financial future.
Emergency Fund
Budgeting is a popular aim for a reason; it keeps people on track and helps them control their spending habits. However, budgeting can be challenging to maintain because there are so many variables. First, there are the regular fixed expenditures such as housing, bills, and insurance, but after that, expenses can fluctuate, for example, the food shopping or petrol money of entertainment. It is easy for one unexpectedly big expense to throw off your whole budget for the month, which is why you need an emergency fund.
The amount that you should have stashed away varies depending on who you ask; some people recommend six months salary, but that figure is disputed and, for some people, a little bit unrealistic. It may be worth sitting down and working out your expenses and then use those to come up with a flat figure. How can you create an emergency fund when you have no extra income? Start small, save a couple of hundred pounds a month or whatever you can afford. If you save diligently and consistently, you will find that your fund soon grows. If you get a bonus or unexpected monetary influx, add it straight to your savings as you won’t miss it. Cutting unnecessary expenses and streamlining, as mentioned above, can be an easy way to add more to the fund.
Debts
Nothing depletes savings like a mountain of debt. So if you want to protect your family’s finances, now is the time to pay it off. Although, of course, that is easier said than done. There are some tips you can use to help you tackle your debt; you should start by paying down the debts with the highest interest rates first. Some people prefer to get rid of their smaller debts first which can help in that it gives them the motivation to keep going, but the debts with higher interest rates can really snowball, and so they should ideally be tackled first. As you begin to make your way through your debts, you may find that you have extra cash which you can use to pay down your debts more quickly or contribute more to your emergency fund.
Insurance
Insurance can seem like just another expense, but you do need it – car insurance, home insurance, life insurance and income insurance. Not buying insurance remains one of the biggest financial mistakes that people make, or if they do buy it, they tend to go for the cheapest option without really considering what it covers. Do some research and look into what you are actually buying. Do you understand the terms used in insurance paperwork? Some insurance companies include things in the fine print that you need to understand.
Insurance helps you plan for the worst-case scenarios, although most people only have a few different policies. A lesser-known policy is that of income insurance. But what is income protection? Income insurance allows you to claim a regular income if you can’t work because of sickness or disability. These payments continue until you can return to paid work or you hit retirement age. This type of insurance is advisable for any member of your household that contributes a regular income. If this is something you would like to consider, look up Drewberry Insurance as their policies come highly recommended by their previous clients.
Invest in Yourself
One great way to help you reach long-term financial security is to invest in yourself. Expand your skills and improve your education. The more capabilities you have, the more valuable you are as an employee. Trying to grow as a professional ensures that you won’t be left behind; it puts you in a competitive position for many job roles besides the one you currently hold. You may also find that you get more opportunities to venture out on your own to explore other possibilities for wealth. You should make sure that you can determine your value in the workforce and don’t have to rely on someone else for it.
Leaving a Legacy
Some people think that leaving a legacy refers to inheritance or the passing down of a family business, but this isn’t always the case. It is important for your family’s financial future that you are teaching your children the best financial practices. Help them to see what they should prioritise and that it shouldn’t necessarily be having the latest games console or smartphone. Get them involved in budgeting and the bills. Giving your children the tools they need to make sound financial decisions is an excellent way to further the financial stability of your family for generations to come.
That isn’t to say that leaving a financial legacy is not also important. You should also be considering your family’s future if the worst were to happen. Look at all the scenarios and plan for each of them. It is all about limiting the financial blow it will cause your family and making sure they will be okay in your absence.
In Conclusion
There are several things you can do to protect the financial future of your family. It will require a lot of planning which may be stressful to begin with, but these things will soon become habits, and you won’t think twice about them. The peace of mind you can get from knowing that your family’s future is protected can be a great comfort.
