Being able to leave a financial legacy is a privilege not many people are able to experience. Building a financial legacy is one thing but being able to maintain it for generations to come is another.
Did you know that 70% of families lose their wealth by the second generation? Taking small steps today and passing them on to your loved ones may not happen overnight and mistakes will be made, but here is how you can create a financial legacy that will last.
Invest in your financial education
For anyone looking for a way to grow and protect their financial safety net will come across the term 'financial literacy’. Financial literacy has become a known tool to give people the ability to find a sweet spot with their finances. It also helps you make your finances work for you instead of the other way around. Many tools are available for people looking to become financially literate such as the 22Seven App.
However, it is important to take whatever information you find online with a pinch of salt. Finding information from accredited sites is recommended due to a large amount of available misleading financial advice. Remember that your situation is different from the next person's. Therefore, what may work for them may not work for you. The best route to take is approaching a financial advisor who will be able to assess your situation and offer options that will best suit your financial situation.
Break bad money habits
There are good money habits and there are bad money habits. Bad money habits are things that may seem like they are not immediate threats to your financial future but can affect your financial future. Simple things such as not being able to budget, manage debt and save can derail any financial legacy you are trying to create. Being able to master these small steps can have a positive knock-on effect that help you make smart money moves that can benefit you and your loved ones in the future.
Financially planning for the future
Creating something like a financial legacy will not happen overnight. However, taking advantage of financial planning can give you the advantage you need while it is still early to create something that will last. Financial planning does not only create a financial safety net that acts as a buffer while you are still living, but it also ensures that your loved ones will be provided for long after you have passed away.
But where do you start? Begin with creating something basic such as an emergency fund. The key is to contribute something that you will be able to stick to monthly. Protecting your ability to earn an income is also an important thing to consider.
Look for ways in which you can have passive income without putting strain on your finances. Having policies such as life insurance and funeral cover can also be beneficial to not only protecting you but also providing for your loved ones.
Be patient with yourself and what you can do. The aim is to start as soon as possible and consistently work towards your financial goals while passing on your financial lessons to your loved ones to ensure that your legacy is handled well.