Financial building blocks: ABC
As parents we strive to provide the best for our kids. We feed, clothe and help them with their homework, drive them to their sports events, all to ensure their future is bright. What would happen if you couldn’t do all of this? Of course, you would never stop voluntarily, but what if you or your partner were out of work, become disabled or worse, die prematurely? How would things change for them and what would the long-term impact be for their future?
While your children are attending school, perhaps it is a good time to review the ABCs of financial security. Most of us focus on market conditions and picking the right investments, and we overlook the foundational items. These are far more critical to your financial future and that of your family.
- A – Assurance: Life Insurance
- B – Beneficiaries: Wills and POA
- C – Contingencies: Emergency Fund
A – Assurance: Life Insurance
Before you step out the door. Before you buy your next cup of coffee, do you have enough coverage on yourself and your partner to ensure the surviving single parent can handle it all? If you are already a single parent, will there be enough to care for your children the way you want? What if you cannot work because of an accident or sickness? Will there be enough income to cover the growing bills? Speak to a qualified insurance professional to review your existing benefits and recommend solutions for any gaps in coverage.
B – Beneficiaries: Wills and POA
Only 30% of Canadians have a signed and current will and Power of Attorney. Besides the cost and complexity of dying without a will, not naming the guardian for minor children can be disastrous. Only you know who is best suited to care for your children. Make sure you name them in your will. We can help direct you to suitable lawyers to have this done right.
C – Contingencies: Emergency Fund
Life is full of surprises. The more we are prepared for them, the more secure we feel and the better we navigate those moments of change. Do you have an emergency fund established? This is normally 3-6 months of living costs set aside in cash that is liquid. If your car breaks down, the roof leaks, or you are laid off, no reason to panic if you have this reserve.
While your children are in school, how about doing a bit of your own homework? Life’s lessons usually come after we have been tested. However, for these three items, you just got the lesson. Will you pass the test?