The biggest fear any parent faces is not being able to protect their child(ren) or those they love the most, especially if it is something that they could’ve controlled.
While we may not be able to foresee all financial curveballs that are thrown at us, you can financially plan for your family to face those tough times. Here are tips on how you can protect your family financially.
Track your income and expenditure
The best way to assess any situation is by knowing where you stand financially. With that said, knowing your income and listing your expenses can give you an overview of where your money is going. This can be beneficial when you are looking for ways to save or cut back. Getting three months’ worth of bank statements can also help you create a realistic budget since it documents your daily spending habits.
Ideas on how you can use the surplus
The difference between someone who has R500 left over at the end of paying all their bills compared to someone who has R5,000 is what they do with that money.
After you have completed calculating where your money is going, and what you would like to cut back on, you will have some money left over. Whether it is R500 or anything above R5,000 the key is to grow it.
You can use this money to invest in policies that safeguard your and your loved one's financial future such as life cover, investment portfolios, or an income/disability protection cover.
Don’t let debt slow you down
There is good debt, and there is bad debt. The difference is that the one is used to supplement an existing budget without overextending yourself, the other will see you drowning in it.
Always evaluate your debt. Starting with the biggest one can make paying off the rest of your debt easier. However, it is crucial to be realistic regarding what you can afford and how much you can pay off each month.
You could use some of the surplus you have to increase the amount you pay towards your debt to reduce it.
Protect your and their health
Having a medical aid in place is crucial when it comes to protecting you from out of pocket expenses. Compare the various options that are suitable for your family, and that will be more cost-effective such as having many benefits that are suitable for you.
Set financial goals
While saving, investing and cancelling debt are all great financial steps to take, having goals can give you a clear direction. Not only will it help you track your spending better, but it can also help you see how close you are to achieving your financial goals.
Being financially savvy means constantly re-evaluating your finances to support the growth of yourself or that of your loved ones to eventually preparing for retirement. Whether you are well on your way to doing this or still finding your feet, having a safety net such as life cover is crucial.
It will ensure that the financial gap that comes with losing you is covered, educational needs in the future are covered, and that any debt you may have accumulated over the years is handled.