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To a certain extent, your future is dependent on your financial circumstances, which is why it’s important to manage your money effectively. If you want to ensure that you and your family will be secure for decades or generations to come, there are steps you can take to build wealth and protect your assets. For inspiration, take a look at these four ways to secure your family’s financial future now:
Take Out Life Insurance
If you want to ensure that your family will be financially secure when you’re no longer around, life insurance is a must-have financial product. With various different types of policies available, you can choose whether to increase your premiums as you get older or to decrease the amount of cover you have. You may want to choose a larger policy when your children are minors, for example, but allow it to decrease as they get older and are more self-sufficient.
Create a Living Trust
A living trust can be used to give the responsibility of managing your assets to someone else, usually a family member, close friend, or a professional third party. Crucially, a living trust will stipulate that your assets must be managed to the benefit of a future beneficiary or beneficiaries, subject to any alternative clauses. There are different types of living trusts you can use, so it’s always worth seeking advice from a living trust attorney prior to making any decisions. With the potential to reduce the tax owed on your estate and avoid the probate process in the event of your death, however, a living trust can be a financially savvy move for many people.
Reduce Debt
Most people have some form of debt but the amount you owe and the type of debt you have can have a significant impact on your family’s future. A repayment mortgage with a low interest rate can allow you to build up equity in your home which can then be passed to children or other family members in the future, for example.
In contrast, secured credit cards with a high interest rate could mean that the amount you owe increases over time, even if you make regular monthly payments. If you want to avoid your funds being eaten up by unmanageable debt, reassess your current financial situation and seek expert advice to create a debt management strategy.
Protect Your Income
At a time when people switch jobs and careers regularly, it can be important to protect your income. If you’re self-employed or own a business, for example, you may want to take out income protection insurance to ensure that you won’t be left without earnings if you’re unable to work for any reason.
Factor in the Future When Making Financial Decisions
It can be easy to think short-term when you’re managing your money but considering the future is always important when making financial decisions. Whether you’re taking on liabilities, contributing to a savings plan, or acquiring assets, thinking about how each decision will impact you in years to come will give you the opportunity to secure your family’s financial future.
