According to a 2015 study by Northwestern Mutual, 34% of Americans have no financial plan for the future. Consequently, you are definitely not alone if you feel you need to get your finances in order but haven’t taken any concrete steps to achieve this.
Financial security becomes even more important regarding the family. You need to ensure that your family is financially stable enough to get through daily life and navigate through life’s challenging times. Luckily, there are many ways to protect your family’s long-term financial health. Here’s how to secure your family’s financial future.
Defray bad debt
Few factors hinder your ability to secure your family’s financial future more than bad debt. Medical bills, student loans, car loans, and credit cards can choke your budget and erode your cash flow.
Consequently, make it a top priority to defray your bad debt as soon as possible. Research shows that the average American is $90,460 in debt, and experts believe many people are too passive to pay their debts.
Therefore, it is prudent to go on the offensive when clearing debt to increase your chances of paying it down quickly. For this, you will need an effective, tried-and-tested debt repayment approach. You can try the debt avalanche method, which involves making minimum payments on all outstanding balances and using the surplus to repay bills with the highest interest rates. Then, you will move down the list till all your debts are paid off.
Plan for your estate
Many people assume they need a seven-figure net worth before paying attention to estate planning. However, financial experts agree that everyone should have an estate plan. This plan includes your power of attorney, guardianship designations, will for your estate, and so on.
Numerous online services can help with estate planning for less than $100, so you can consult them if you prefer a fast and inexpensive way to do this. However, an estate planning attorney’s services are better if you prefer something more tailored to your needs.
Teach your children about money
It is no secret that financial literacy in America is at an all-time low. The Milken Institute estimates that only 57% of adults in America are financially literate. Consequently, your children’s financial education isn’t something to take lightly. Teaching your kids about money will help them cultivate good financial habits that will sustain them as adults.
This way, you won’t have to spend your retirement savings supporting them throughout adulthood. Additionally, your children will hopefully inherit some of your wealth in the future, so this financial education will ensure that they are well-equipped to manage these funds. This way, you can help secure your family’s financial future for many generations.
Invest in the right insurance products
Insurance isn’t the most fun thing to buy, but no one can deny that it is one of the best ways to protect any family’s financial future. Insurance is a great hedge against life’s many uncertainties, so it is worth having to make sure your family is protected in worst-case scenarios.
For instance, purchasing a life insurance policy ensures that your children and other beneficiaries will receive payments when you pass away. Health insurance and long-term disability insurance policies are also worth taking out to secure your family’s financial future, so keep them in mind.