We all want a secure future for our family and key to this is financial planning. Most of us have a weekly or monthly budget in place, and know that if we stick to the budget there will be enough money in the bank to cover the bills.
Holidays, Christmas, car repairs and things like the kid’s school uniforms are also normally budgeted for and many people save for these items. However, many of us do not have any money in reserve for unexpected events like serious illness, the loss of a job or the death of a close family member – only 38% of people say they can afford to cover an expense like this. These events cause a lot of pain, stress and heartache, which is often made far worse because of the added financial pressure.
Why it’s important to make plans now
Nobody wants to think about worst-case scenarios, so there is a tendency for people not to put the necessary measures in place to help them to cope financially. This is understandable and only natural.
However, ignoring the possibility is not a wise approach, especially when it is relatively easy to make sure that your family has the money they need to cope. For most people, the best approach is to take out insurance to provide coverage in the event of a job loss, serious illness or a death in the family.
Taking out an insurance policy will make a huge difference to your family. Provided you buy the right level of coverage, you and your family will have a safety net in the most difficult of situations.
In addition to policies such as life and health insurance, funeral plans are also becoming increasingly common. In 2014, the average cost of a funeral in the UK was £3,609, and research shows that the cost is set to rise as high as £6,800 by 2024. As a result, many families find themselves in financial difficulty when they have to find the money to pay for a funeral. In order to prevent this from happening, more people are choosing to pay in advance for their funeral, so their family aren’t hit by rising funeral costs.
Saving regularly, so that you have a substantial emergency fund available, is another way to take care of your family’s financial future. However, this approach is only a good idea if you can resist the temptation to dip into your emergency funds to buy a dream holiday or car. I appreciate that this is a difficult subject but as you can see, not planning financially for these eventualities has serious consequences for you and your children. It’s worth sitting down and addressing the issue of how you are going to provide financially for your family, in the event of a job loss, terminal illness or death.