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Are you as financially prepared as you should be?

September is national preparedness month and part of being prepared is having financial plans for any circumstance that might arise. Here with a few tips on how to be financially prepared for many of the difficult financial situations we might encounter.
What is the first level of financial preparedness?
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. This includes bill paying, investments and other financial matters that might need attention. It is also important to share all employee perks so no benefits owed are missed.
Are there ways to prepare for a loss of income?
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. Disability insurance will only replace some of your lost income so you also need to build a sizeable emergency fund as well or be prepared to reduced your expenses.
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. The amount you need will depend upon your current financial situation.
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.
Are there any other financial preparedness steps to take?
A great step to take now is to assemble your financial team so you can call an expert when you need one. This team should include an attorney, a financial advisor, an insurance agent and perhaps even an accountant if your financial situation warrants that level of advice. Advance planning will allow you to make a good choice for who should be on your team.

Posted: 9/13/2018 with 0 comments

Categories: Estate Planning, Money Matters, Planning, Saving

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