June is national safety month and one important consideration is making sure you have financial plans for any circumstance that might arise. Protecting you and your family from financial calamities should be an important part of your overall safety preparedness.
What is the first level of building a financial safety plan?
It starts with having an emergency fund to cover any unexpected expenses such as new tires on your car or needing to replace home appliances or even a loss or reduction in income. The emergency fund is key to keeping your budget on track for most any financial crisis.
How can couples increase each other’s financial preparedness?
Be certain that each person knows the family finances so if the person who is primary can’t do it, the other person isn’t left in the dark. Also it is important to share all employee perks so the surviving spouse doesn’t miss any important benefits owed to them.
How can people make sure their income is safe?
One is having disability insurance in the event you are injured or sick and are unable to continue to work for an extended period of time. You are more likely to need disability insurance than life insurance during your lifetime. Disability insurance will replace some of your lost income.
Is there another important type of insurance if we want to be financially prepared?
Probably the most important is having life insurance to protect your family in the event of a catastrophic event. Without adequate life insurance, a spouse might need to significantly change their life which is just another hardship for the family to endure.
What else is critical for people with families?
Having a complete estate plan that includes a will, medical and financial power of attorney and medical directives is extremely important. If children are involved, naming guardians and establishing trusts is a step that should be included as soon as the first child is born.
How difficult and expensive is building a financial safety plan?
Most of the work in building a financial safety plan doesn’t have to be difficult, for example a basic estate plan can usually be done quickly. Adding insurance can be easy but can be expensive so you might have to start small and build to the amount that you need.