3 Important Ways to Secure Your Family’s Financial Future
It’s 8.30pm on a Sunday and my day has been filled with a combination of playing in the garden, doing some admin and reflecting.
Whilst I was doing some thinking, I recalled my 5k run yesterday and how strange it felt to be out.
As at the time of writing, we’re all pretty much locked in during an unusual time in the world due to the global pandemic.
During my run, I barely came across others on my route, but each time I did, I sensed the fear and uncertainty from their body language.
Such are the deeply uncertain times that we are currently living through.
Social media is not helping with everyone sharing almost everything that they come across.
This period of uncertainty is unique because it is affecting everyone in exactly the same way.
For some though, things have been taken to a whole new level and sadly lives continue to be lost.
In my attempt to keep my peace and seek the positives in this current situation, I did some reading and listening.
Something I came across gave me a lot of perspective about life. It hit me like a lightning bolt!
Often when I struggle to explain or make sense of often simple ideas, I prefer to draw them and see them to understand.
It helps me to reflect deeper on that new thought or idea. So here is what I drew to represent my deeper understanding of life:
My previous thought process when it came to life was that we had periods of battles and blessings.
A bit like the seasons of life – You have Winter, then Spring, the Summer, then Autumn.
Everything happened in a sequence. What I have come to understand about life is that at all times in life, there are Battles and Blessings happening at the same time.
Like two parallel train tracks that run side by side to each other as above.
This perspective has helped me to make sense of a lot of the things I’m seeing unfolding in our lives today.
In these times of deep uncertainty, what it also says to me is that these are times of opportunity.
In particular, I see the opportunity of getting our homes and financial lives in order.
Can you think of things that you’ve always wanted to get done but never been able to find the time to get it done?
Neither you nor me can think of a time as unusual as the time we’re in.
Most people are grounded at home and with more time in their lives than ever before.
Opportunity knocks now, but truth be told, only a small percentage of people will open the door.
I’m writing this post so that you first of all recognise the opportunity but beyond that, take the steps to do something about it.
Beyond just talking to you about the opportunities to make more money, today I want to focus on the opportunities to protect it.
This blog post will form one of a four part series focused on getting various areas of our lives in order.
I’ll write about money, relationships, our physical spaces and family life in this series.
Protecting Your Money and Financial Future
Chances are, you look at yourself in the mirror and think you’ve still got it – You’re young.
We work so hard through our lives acquiring wealth that we don’t spend as much time asking ourselves how we protect it.
Today I’m going to speak to you about three fairly boring topics.
Something that your Chief Admin Officer and Home CFO should be thinking about and acting on super fast!
Topics so seriously boring that when they’re uttered, most people automatically switch off.
They’d instead prefer to scroll through WhatsApp, Facebook and Instagram posts.
Guessed it already? Yup! You’re probably right.
You see, these three things I’m about to speak to you about have the power to:
- Change the game financially forever for your children and their children to come.
- Keep the taxman far away from your family’s hard earned wealth for generations.
- Give you serious peace of mind and ultimate Financial Joy when you know you’ve done them.
Oh yes! And I kid not.
The only problem is, most people aren’t even willing to engage in talking about these topics let alone acting on them.
Sad truth is, every death we read about in the papers or hear about in the news will have an untold story tied to one of these 3 things below.
To act on these, you must first begin a conversation in your mind and then in your home and then back it with action.
Let’s dive straight in and tackle them one at a time:
1. Buy Life Insurance
It took me a long time to finally take the step to sort out Life Insurance for me and Mary.
Even though I knew it was something that I needed to do, I just couldn’t fight the resistance of life enough to carve out the time to do it.
Keeping things simple, what you need to hurry up and organise immediately is term life insurance.
Essentially, this is insurance for a period of time in the future e.g. over the next 30, 40 years, etc.
This gives you protection in the event of the death of you or your partner.
Grim subject but an inevitable reality that is happening right now for some.
Will it knock on your door someday – Yes, sadly.
What do you want to happen when it happens?
Well, that’s the conversation to begin having right now. Not tomorrow or next week!
The number one advice I can give you about life insurance is to do it as early as possible.
This is important for 2 key reasons:
i) The younger you are, the cheaper it is. I only pay £29 per month for a lot of cover.
ii) Your youth also means that you’re likely to be healthier and get cover without issues.
I cannot stress enough how important these two points are.
I’m writing this blog post for you like I was writing a letter to my brother and sisters. This is important stuff.
To tell you all you need to know about Life Insurance and to help you take immediate action, here is a video we made on our YouTube Channel:
I have also done a detailed case study on whether life insurance is worth it or not.
Once you have got yourself and your partner some cover (you can do individual covers), have a gentle chat with your siblings.
2. Write a Will
This is a difficult one because it involves difficult and uncomfortable discussions.
Again, this is where The Home CFO takes leadership and begins creating the meeting to have the difficult conversations.
Even if you cannot meet your family members face to face, arrange video calls to make these happen.
In addition to the challenge of having difficult conversations, most people don’t know where to begin with writing a win.
They think they have to find a lawyer and go through an expensive process before having a will created.
The good news is, you don’t.
Beyond Life is UK’s #1 will writing service, which you can use to create a legally binding will in 15 – 30 minutes.
You can do this from the comfort of your home and even have the option to change your will whenever you want.
Everything is checked by an in-house legal expert and they can store your will for you in a safe place.
It costs a fraction of typical lawyer fees at only £90 for a Single Will or £135 for Partner Wills.
Why not make today the day? Take a break and write your will.
3. Plan For Inheritance Tax
There is nothing more painful during a time of family bereavement than to learn that there is a 40% inheritance tax bill due.
Yup! Inheritance Tax is payable within 6 months of someone moving on from this world.
This ofcourse assumes that they have enough for Inheritance Tax to apply.
For most people, it will not apply as there is a decent tax free amount.
However, there is a misconception that inheritance tax only applies to property.
It, in fact, applies to the full value of your Estate. I.e. the sum of ALL your assets (property, cash, shares, savings, etc) less all liabilities.
Essentially, it applies to your Net Worth.
Have your parents sorted this out? This could be a huge part of your future wealth, which could go to the tax man.
Do you need to sort out inheritance tax in your own life in addition to your parents?
Again, this begins with thinking about it, then having many conversations.
Key is to start early. Like today!
To begin, read our detailed guide to inheritance tax.
You can begin to take simple non-costly steps today to secure your future financial life.
Simple things such as gifting the right assets and ensuring you have the documents to prove such events.
To Conclude,
There has never been a better time than now to begin getting your act together and your house financially in shape.
As I write this post, I’m taking steps myself to get various areas of my financial life in shape and ensuring all members of my family are doing the same.
This is a heads up for you too to join in and do what you know is necessary. Cease the opportunity today.
What To Read Next>>
- How to Manage Your Finances and Thrive During a Crisis
- Why Your Lack of Consistency Is Keeping You Poor
- 15 Top Tips To Master Your Money This Year
What is currently stopping you from doing the 3 things I recommended above? Share honestly below.
Do please share this post if you found it useful, and remember, in all things be thankful and Seek Joy.
Ken I was interested in the will service but how do you get the will witnessed when we can’t have contact with anyone? Any suggestions?
I agree 100% with the life insurance, but also make sure it covers critical illness and your kids!
3 years age our (then 2 and half year old son was diagnosed with a brain tumour.
Having life insurance meant that they payout funded my wife to take a year off work to look after him. Thankfully he has recovered now, but that insurance policy was a godsend as we had enough to worry about without adding money on top.
Hi Ken,
I wholeheartedly agree on #2.
On #1, however, I have some doubts. The need for life insurance will strongly depend on your family situation. If you are single / have no one to take care of, I would discourage buying life insurance.
On #3, I am not sure. First, there is a pretty high tax free amount in most countries, if inheritance tax exists at all (it does not in Austria where I am a tax resident). Second, you need not necessarily plan for your family to settle the inheritance bill. They should be able to settle it from the inheritance itself, no?
All the best
Lukas
As always very practical tips which we don’t always remember or think off. Next on y ToDo list is The Will followed by the Inheritant Tax (it almost angers me to think the Tax Man will take 40% of what I have already paid tax on during my life! How unfair)
Indeed, Agnes!! 🙂