It doesn’t matter whether you call yourself an entrepreneur, mompreneur, business owner, or sole proprietor. When you have a family in tow, what’s important is that you have made adequate plans and provisions for your (and their) financial future.
As you know, it’s impossible to predict with 100% accuracy what might happen in the future. With that in mind, you need to have plans in place that will kick in should certain events occur. That way, you and your family won’t need to struggle from a financial perspective.
Take a look at the following ways you can secure your financial future so that your family is well-prepared for anything unexpected that might happen to you:
Get Life Insurance Cover
It goes without saying that you want to ensure your family won’t struggle to pay the bills when you die. That’s especially the case if you’ve got young children at home, and perhaps your spouse or life partner isn’t working or doesn’t earn enough to cover all the bills.
One of the best ways of ensuring that your family won’t need to worry about money for the foreseeable future is by taking out a life insurance policy. How much cover should you take out, you might ask yourself?
As you can probably appreciate, each person’s financial circumstances are unique, so you need to calculate how much cover to take out. In general, you should consider the following:
- The cost of paying off a mortgage;
- Living expenses for a minimum of ten years or until the last of your children turns 18;
- Costs related to paying off any of your personal debts;
- Funeral expenses.
Consider Key Man Insurance Cover
You run a business, and it’s likely going well and remains profitable despite challenges like COVID-19 impacting everyone’s daily lives. But, what would happen to your business should something like a disability or worse occur to you?
In such situations, key man insurance cover can be an excellent way to ensure business continuity. In a nutshell, “key man” insurance is a type of cover that protects a business from such catastrophic changes to personnel in a business.
In case you wondered, key man insurance cover is available to everyone irrespective of gender. So, what help can such an insurance policy offer? It can provide several financial advantages to your business:
- Your business will have extra capital available to continue operating, especially if you’ve hired employees to work for you;
- The money can pay for the training and recruitment of someone to cover your role in the business;
- It can also provide salary continuation payments to your spouse or life partner while they take over your share or ownership of the business;
- If your spouse or life partner wants to close your business if you cannot run it due to disability or death, the money can pay any company debts.
Some business owners might have key man disability or life insurance cover, whereas others prefer to take out both types of policies. Note that you can have such insurance on top of your personal life insurance coverage.
Invest in a Pre-Paid Funeral Plan
The sad truth is that even dying is expensive in the United States and much of the world. When you pass, someone has to pay for your funeral expenses. Sometimes, that can get done if payment gets made from your estate when you die.
However, if there is no money in your estate, it’s up to your family members or even friends to cover those costs. The government does provide some financial assistance if there is no money to pay for your funeral costs, but that financial help is often very minimal.
With those thoughts in mind, it makes perfect sense to pay for your funeral costs in advance. Did you know that you can invest in a pre-paid funeral plan so that when you do leave this mortal coil, all funeral-related costs get taken care of, with no further fees to your family?
What’s also good about a funeral plan is how you can customize your wishes. For example, you can specify whether you want a burial or cremation. You can even ask for a “green” burial if you’d prefer a funeral that has little environmental impact on the planet.
Other requirements you can specify include floral arrangements, whether you want a funeral procession, limousines for your close family members, and other arrangements for the day of your funeral.
When you compare different funeral plan options, make sure you select a provider that will guarantee the price you pay today won’t increase in the future. Also, you should check the company you use allows your family to specify any changes before your funeral occurs.
Diversify Your Investments
Now that you know how to ensure your family is financially secure if something happens to you, such as a disability or death, the next step is to look at ways of decreasing your financial risk and increasing your chances of growing your money.
One of the best ways to achieve that goal is by diversifying your investments. For example, you’ve obviously invested in your business. But, it’s also worth getting shares in other companies or following proven financial indices.
You could also consider investing some of your cash in precious metals or properties, both of which tend to ride out most financial storms. Avoid questionable investments such as cryptocurrencies, as they tend to be very high risk despite the potential high rewards.
Open a Roth IRA Account
Lastly, your income will undoubtedly fluctuate each month due to the nature of your employment status. Even with that in mind, it still makes sense to put some money aside each month for your retirement.
One practical way to do that is by opening a Roth IRA account. They are similar in some respects to traditional IRAs, but the way they get taxed is different. If you satisfy certain conditions, Roth IRAs aren’t subject to tax when you make withdrawals.
CANDY TAI is a wife to David and mom of 5 with a degree in Communications. She's a native Texan (Hook 'Em Horns!) who's been making her home in the Kansas City metro area for nearly 15 years. She loves being able to shuffle her kids from their various sports activities, piano lessons, and school activities. She enjoys fashion, beauty, reality TV, and moviegoing.