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Protecting your family should always be your top priority. Despite the best-laid plans, sometimes life throws a curveball, and things don’t go as envisioned. Unforeseen circumstances happen to everyone, and it’s essential to know how to protect your family against these events. Here are some tips on how you can do so.
Debt is one of the most common unforeseen circumstances that arise. A person can accrue a lot of debt and not realize it until it’s too late. It’s not enough to get out of debt, though. You need to take active measures to make sure you don’t get into debt in the future, as well.
There are many things you can do to reduce your debts:
- Pay off as much debt as possible before taking on more.
- Revisit your budget and make sure that it doesn’t have any unnecessary expenditures.
- Decrease your monthly bills and cancel services you don’t need.
- Review your credit score and try to improve it if needed by paying off lingering balances or working with a credit counselor.
A good rule of thumb is to have no more than 36% of your annual income going towards paying off debt. Carrying an excessive amount of debt can adversely affect your financial future, so keep an eye on it and try to keep it below 30%.
Take Out Life Insurance
One of the more obvious ways to protect your family is to take out life insurance. It may seem morbid, but it’s one of the smartest things you can do when considering what would happen if something happened to you. Life insurance provides an income for your family if you are no longer around. Regardless of your occupation and the type of death benefit you have, life insurance will ensure your loved ones have been looked after. Remember that life insurance policies come in all shapes and sizes with different terms, so make sure that you understand what type of policy best fits your family’s needs. In some cases, you might need to seek the services of a wrongful death lawyer to facilitate a payout or protect your family in the event of a tragic accident.
Have an Emergency Fund
Having an emergency fund is one of the most important things you can do to protect your family from unforeseen circumstances. If you’ve ever had to use your savings account to cover a car repair, medical bill, or other unexpected expense, then you know firsthand how draining it can be. Having funds set aside in an emergency fund and knowing that you have money saved up for emergencies will help keep your family afloat.
An emergency fund is different from a retirement fund because retirement investments are typically more long-term (typically for ten years or more). You want to save at least three months of living expenses in an emergency fund so that if something happens (like unemployment), you will have money to support yourself and your family until you find another job.
Keep Supplies At Home
One of the best ways to protect your family against unforeseen circumstances is to keep emergency supplies at home. This includes keeping a few days’ worths of food, water, and gas in case of emergencies. After all, you never know when something like a power outage or natural disaster might happen. A flooded basement or other emergencies might require you to stay put for a few days, which means you need a stockpile of supplies handy to ride out the event.
Another way to be prepared is by having an emergency kit at home with essential documents and health records. You want these things close so that they’re easily accessible in case of an emergency. Keeping these things stored away somewhere else means it might take hours to retrieve them if needed.
Keep on Top of Health
One of the best ways to protect your family is to keep on top of your health. This means making sure you’re eating healthy, exercising, and getting enough sleep. If something were to happen to you, these three factors would be most important for your family during this time. You can also take advantage of programs like Medigap that will help provide coverage for certain things that may arise with a health issue.
You should have adequate health coverage too. You may be able to get your employer’s coverage if they offer it, or you may need to purchase private insurance. However, with the Affordable Care Act (ACA) in place, it’s important to note that there are several new rules regarding eligibility and coverage. Make sure you understand these before purchasing a plan.
Your family will be protected with health insurance should any illness or injury strike.