Future by its very definition is uncertain and unknowable. While for us all a little insight about the future would be more than welcome, the truth is one can never really know what may or may not happen.
This may be frustrating, but with proper planning, you can ensure that no matter what the future holds, you will be able to take care of the financial needs of self as well as your loved ones.
Here is how you can plan and be prepared for the future:
Create an Emergency Fund
Create a fund for emergencies to ensure that you and your family are prepared for any unexpected happenings. This will also protect you from the stress of emergency expenses.
Even if you put a small amount into a separate account every month, it can be a good start. This fund will help you deal with any future emergencies such as a period of unemployment, unplanned travel, or unexpected medical expenses without much stress and worry.
As per financial experts, you should aim to have an amount equivalent to at least three to six months’ salary saved in your emergency fund.
Manage Your Debt Well
An ideal way to keep your finances in order and ensure a secured financial future for your family is to reduce or eliminate debt as much as possible.
If you regularly use credit cards, check interest rates of all cards. Try and use the cards which have lowest interest rates and ensure that you pay off your monthly credit card debts to avoid paying large interest. The lesser you spend every month, the more you can save and invest towards your future.
Plan for The Future Financial Needs of Your Children
Some key financial expenses of your future are the expenses towards your children – their education, lifestyle and marriage. To help you with these, there are a plethora of investment options, but you need to identify the appropriate investments at the right time.
Secure Your Family
You work hard not just to have a safe financial future but also to make sure that your family can enjoy a good and secure lifestyle. Any unfortunate circumstance such as illness, disability or death can significantly impact your family’s financial future.
Although we hope and believe that something like this would not happen to us, but as they say, it pays to be prepared. Term insurance especially with riders (disability cover or critical illness rider) not only protects you but your loved ones too. It can ensure that your loved ones can continue to enjoy the lifestyle you’ve worked hard to provide.
You can utilise various term insurance calculators available online or take the help of a financial planner to determine the coverage amount needed to secure your family’s future in your absence.
Protect Against Future Health-Related Expenses
As per WHO statistics, close to 47 percent hospital admissions in rural India and 31 percent in urban India are funded by loans, which have, in turn, left many debt-ridden families.
This alarming statistic shows how important it is to plan for any known or unplanned health-related expenses since these can be a major drain on you and your family’s finances.
A way to protect against future health-related uncertainties is to opt for a health insurance plans and cover all your family members.
Monitor Your Investments
An often-ignored aspect of planning for the future is monitoring how your investments are progressing. Your hard work on creating a plan and building a portfolio may go to waste if you skip the monitoring part.
A regular review will help you understand the exact progress you are making towards your goals and allow you to rebalance your portfolio or take timely corrective measures if needed.
Experts suggest that you should undertake quarterly monitoring of your investments for short-term goals, and an at least an annual monitoring for long-term goals.
Covering every relevant aspect of life from health expenses to children’s future and family’s financial well-being will allow you to live confidently and be prepared to deal with whatever life throws at you.
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