Desperate times call for desperate measures, at least that's what many breadwinners are chanting to themselves as they try to think of ways to protect their families financially from the after burn of the recession. Many have lost most or all of their retirement savings, while others have lost their jobs, homes and most importantly, their pride.
Whether you have been heavily affected by the recession isn't as important as what steps you plan to take to protect your family from damage (or further damage) since the economy is still shaky. If you're not sure how to go at it on your own, here are some steps you can utilize to get you started.
- Sign Up For Life Insurance. This is one of the first things you should consider when thinking of ways to protect your family financially. You never know when your time is going to come, and you definitely don't want to leave behind any financial worry. When thinking about how much your beneficiaries will receive, consider not just daily bills, but also funeral expenses and how much it will cost to pay off your debts. This is the sure-fire way to protect your family when you are no longer able to provide for them.
- Take Out Disability Insurance. Disability insurance protects in the event that you suddenly become disabled and are unable to work temporarily or even permanently. Depending on the type of policy you and your spouse get, you can be protected under both scenarios. It's important to consider this type of coverage for the breadwinner of the family.
- Set Aside Emergency Funds. Saving is a key component in protecting your family financially. If you don't already have one, you want to set up a family budget so that you begin cutting back on unnecessary expenses and create enough extra income to save for emergencies. Your goal should be to have enough saved so you can pay all of your monthly bills over the course of at least eight months.
- Screen for Identity Theft. Many people don't consider identity theft as a threat to their finances. But if someone steals your identity, opens credit cards and other accounts in your name, and charges out of control, you will be spending tons out of pocket to either pay the debt off, or pay for someone to help you get it all straightened out. To avoid this situation, it's good to check your credit report on a regular basis and sign up for an identity protection monitoring service like the one offered by GoIdentityProtect.com. Also, you can check to see if your child has credit information as well, to make sure no one is using them in this way.
- Secure Mortgage Protection Insurance. If you die, this type of coverage will make sure that your mortgage is paid off completely and sent directly to your lender. This insurance will only cover your mortgage, so be sure to maintain a life insurance policy for money for the family.
- Save for Retirement and Invest. There are numerous ways to save for retirement, including contributing to a 401k plan or an IRA. Also, you may want to look into diversified investment opportunities (stocks, bonds, CDs, etc.). Additionally, you want to place money aside in high-yield savings accounts. The more ways you save and invest, the more opportunities you have to bring in reasonable returns to build a quality nest egg.
Provided by Finance Tips at Go Banking Rates.