Steps Toward Financial Protection
New Year’s resolutions are made by almost half of all Americans. Along with exercising more and eating healthier, many people want to improve their financial situation.
If you fall into this category, we’re here to help. Here are seven certain ways to a more financially secure future for you and your family.
Make A Budget.
Making a budget is the first step toward becoming financially fit. Everyone has to know how much they earn, how much they spend, and how they plan to reach their present and future financial goals. The Federal Trade Commission has information on budgeting. Make careful to stick to your budget when you’ve created it. Also, revisit it on a regular basis and make any necessary changes.
Debt Management And Debt Reduction
A budget will assist you in keeping track of where your money is going. It will also assist you in determining areas where you are overspending. It is vital to eliminate any unnecessary spending. Work to reduce your debt load as well. You will be responsible for paying interest as long as you have debt. (Always try to pay more than the minimum on your credit card each month!) Set targets for debt repayment and keep track of your progress.
Set Up An Emergency Fund.
An emergency fund is money set aside for unanticipated needs. It could be an unexpected home or car repair, or it could be a job loss. An emergency fund should contain three to six months of essential living expenditures, according to most financial advisers. However, accumulating those funds takes time. Make the process easier by having a portion of your paycheck put into a separate emergency fund account. You can also instruct your bank to transfer funds to a savings account designated for emergency expenses. Even a tiny sum each week will get you there.
Purchase life insurance to safeguard your loved ones and examine it on an annual basis.
If you die, your loved ones will receive money to sustain their standard of living. This is known as the death benefit, and it can be used to replace your income, pay off debts such as a mortgage, and cover funeral expenses. It can also aid with future needs such as college tuition, retirement, and many other things. Experts recommend purchasing life insurance that is 10 to 15 times your annual gross income. Use an online calculator like the Life Insurance Needs Calculator to get an estimate of how much you need. Then, consult with an insurance specialist to determine your options and obtain the appropriate coverage. Make careful to examine your life insurance policy every year or after a major life change, such as purchasing a new home, having a baby, or moving employment.
Disability insurance should be reviewed annually to protect your paycheck.
Disability insurance is one of the most effective ways to safeguard your most valuable asset: your salary. If you are unable to work due to a disabling disease or injury, disability insurance normally replaces 50% to 70% of your earnings. An online calculator, such as the Disability Insurance Needs Calculator, might help you figure out how much you might need. As your salary rises, review your coverage with your HR department or an insurance agent.
Keep Recipients Informed.
It is critical to change the beneficiaries on your financial accounts, such as your life insurance or 401(k) (k). This is especially true following significant life events such as marriage, divorce, birth, or death. Not having the correct beneficiary can result in money being sent to the wrong person or delays in disbursement.
Make A Determination.
A will is a legal document that allows you to determine what happens after you die. They may include who will distribute your assets, who will ensure your desires are followed out, and who will care for any minor children. Without a will, the state may decide who receives your children and other assets. Fortunately, drafting a will is not as difficult as many people imagine. And it’s well worth it because it saves your family from a slew of headaches. A lawyer can assist you in drafting a will and discussing other issues such as power of attorney.
Put Money Aside For Retirement.
Use any available resources to help you grow your retirement savings. This includes participating in your company’s 401(k) plan or researching other retirement savings choices such as an IRA. Take advantage of any “matching money” offered by your employer for 401(k) contributions. Matching funds are essentially “free money.” Furthermore, contributions to your 401(k) reduce your taxable income.
Follow these measures to make 2023 the year you become financially fit. Each one will help you and your loved ones have a better, more secure future.
Why Do Single People Require Life Insurance?
Many individuals wonder if single people need life insurance.
It’s easy to conclude that the answer is “no.” After all, the primary aim of life insurance is to provide money to your family in the event of your death. So it appears rational to believe you don’t need life insurance if you don’t have a spouse or children who rely on your earnings.
However, there are situations when single people require life insurance. Here are some of the most popular reasons to think about getting life insurance if you’re flying solo.
Why Do Single People Need Life Insurance?
You owe money.
One of the main reasons why single people need life insurance is to avoid burdening others with debt. This is common when you have a cosigner on your loan or split a mortgage with a friend, relative, or someone else.
Private student loans might be particularly taxing on your cosigners. This is due to the fact that, unlike federal loans, they are not discharged when you die. This might leave a cosigner, such as a parent, liable for tens of thousands of dollars. Shared mortgages may potentially put your co-borrower in the same situation.
Term life insurance is an easy and reasonable solution if you have this type of debt. If you die prematurely, it will step in and pay off your portion of the loan.
There are individuals who rely on you.
Just because you’re single doesn’t mean you’re not needed. Maybe you’re a single parent with small children. You may also have elderly parents or disabled siblings that rely on you. If you rely on your paycheck to make ends meet, you almost likely require life insurance.
You own a company.
The financial organization that issues your business loan will almost always require you to have life insurance. This is to ensure that they receive their money if you die before the debt is paid off.
When you have a business partner, you must also obtain life insurance. Your death will very certainly leave the company in a bind. Fortunately, there is a type of insurance known as “key person” insurance that can assist in keeping the firm running in the case of your unexpected death.
You intend to pay for your final expenses.
Did you aware that a funeral can easily exceed $10,000? (In case you’re curious, the FTC outlines all funeral fees.)
A five-figure price tag for a dignified burial is one of the main reasons why single individuals need life insurance. Without it, it will be on to your friends and family to cover the bills. (Alternatively, you may not receive the appropriate send-off.)
You wish to increase your wealth.
Life insurance isn’t just there to cover expenses if you die. If you have permanent life insurance, it can also help you while you are alive.
Permanent life insurance provides a death payout as well as tax-deferred cash value accumulation. You can utilize the money you’ve saved to enhance your personal wealth, buy a property, augment your retirement income, cover an unexpected bill, and other things.
You want to secure coverage while you are still young and healthy.
Your health influences whether you obtain life insurance and how much it costs. In general, younger, healthier people have an easier difficulty obtaining life insurance. They usually pay less for it as well.
For these reasons, it’s generally a smart idea to lock in coverage at a low cost while you’re still young and healthy. If you wait until you acquire a health condition, getting life insurance can be difficult (if not impossible). This can be difficult to accept if you have a partner or children who rely on you at the time.
You want to leave a lasting impression.
Another reason why single people require life insurance is to leave money to a valued school, religious organization, charity, or individual. Some or all of the policy’s revenues could help further a purpose near and dear to your heart. If you choose to give the money to someone you care about, it may also help them realize their dreams.
These scenarios demonstrate why single people want life insurance. If any of these seem familiar, offer yourself some love by speaking with an insurance specialist about your alternatives.