Building a secure financial future and legacy for your family doesn’t happen accidentally. It takes consistency, effort, and focus over many years. It might not be easy but the satisfaction of knowing all your dedication has built a secure, promising, and financially free future for your family is absolutely worth it.
What can you do to secure your family’s financial future? Let’s take a look at some simple steps you can take…
Live below your means
Warren Buffet could afford the most luxurious, opulent homes in the world, but the billionaire investor still lives in the same house he bought in 1958 for $31,500.
Living below your means is the smartest thing you can do when it comes to setting your family up for a secure financial future and legacy. I mean, imagine the legacy Buffet will leave his kids?
Aside from powering up the amount you can save, deep contentment can be found in living a modest lifestyle. You don’t get caught up trying to buy your way to happiness with material things. Only to find the credit card bill sticks around a lot longer than the happy buzz of owning the latest iPhone.
Set this example for your kids and you’ll leave them another type of legacy. The knowledge that they don’t need all these random ‘things’ to make them happy. They won’t waste their time – and money – forever trying to keep up with the Joneses.
Pay off debts
You must commit to eliminating your family’s debt if you want to maximise the legacy you leave for them. Every dollar you pay to the bank for loans and credit card debt is one dollar less you can invest in your family’s future.
You might think debt is normal. That everyone has big repayments they need to keep on top of so what’s the big deal? If you want to achieve financial security for your family, you can’t think like everyone else, buck the trend of debt and do what it takes to be free of it. No matter how long it takes.
“If you will live like no one else now, later you can live like no one else.”― Dave Ramsey
Make sure you have life insurance
This is an important one folks. When you’re young, life insurance might not seem like a big deal. As you get along in life – married, kids, house etc – life insurance should become a fundamental part of your sound financial plan.
Life insurance is actually one of the first steps of financial security in our 5 Steps to Financial Freedom and Investing Bootcamp programs. While it isn’t cheap, it does have the power to remove substantial money stress from your life.
Getting total and permanent disability (TPD) cover is another option to consider. This cover will pay a lump sum if you become totally and permanently disabled. If this happened, your family would not only have to deal with a lost income but would also need to maintain ongoing care costs.
Create a lifetime income stream with investments
Imagine leaving your family a financial legacy that continued to build their wealth and their children’s wealth for years to come. It would be an incredible feeling, don’t you agree?
They say that you have the power to create financial security for two generations by building a secure financial future that is based on passive streams of income.
Put the right investing plan in place now and that type of legacy could be what you give to your family.
The sooner you take action and map out a strategy, the better the long-term results will be. You might surprise yourself with how adept you are with investing and be able to improve your standard of living now even while building your family’s future security.
Teach your kids smart money habits
Financial habits and attitudes are usually formed early on when we observe – either consciously or unconsciously – how our family handled money.
Setting your kids up for financial success isn’t about giving them a bunch of cash. Sure, you can do that but if they don’t know how to handle the money, you’ll find that it may disappear quicker than you can say ‘inheritance’.
Give your kids the legacy of financial education and good money habits. Talk to them about practical money management. Go over the family money plan, what things cost and explain to them how you rationalize purchasing decisions.
Set them up a savings account (or savings jar) for them to manage themselves. As they get older include financial gifts at birthdays and Christmas to teach them about money.
A kid who’s smart with money grows into an adult who’s smart with money. With or without your financial input, they’ll be able to build their own wealth and financially secure lives. Recently I was given the incredible privilege of teaching a young 16-year-old lady how to manage her money and grow her wealth. Her parents gifted her a financial education, and that is a gift that will be worth a whole lot more than any material items she could have asked for. I can’t wait to watch her progress.
Save small to gift a big financial boost
Put away $100 a month at 5% interest from the first year of your child’s life until they’re 21 and you’ll have more than $44,000 to gift them as a young adult. It’s a big financial boost for a first home, to begin investing or put towards university fees.
Make sure your Will is up to date
Getting the pieces of your financial life in order for your family, in the long run, means making plans for the time you’ll no longer be here.
Your Will is probably the most important document you need to consider when it comes to securing your family’s financial future in a life without you. Having a legal and up-to-date Will means your assets will be distributed according to the vision you worked hard to give to them.
With the right planning, commitment and focus, you can create a life for your family free of financial worries, during your lifetime and beyond. I think that a financial legacy is something incredibly motivating to work towards, don’t you?
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