Keeping Your Family Financially Safe – Planning for an Emergency
Life as we know it can change overnight – with little or no warning, our family’s welfare and financial security could be put at risk unexpectedly. While we have no control over the acts of Mother Nature, we do have control over our family’s financial security and well-being. As a mother, I want to ensure my family’s physical and financial safety and found some great information in an article entitled, “3 Steps to Preparing for an Emergency.” Here are the 3 steps to preparing for an emergency:
One way we can help to protect our family financially is by having appropriate insurance coverage. Not only having basic insurance, such as auto, homeowners and health, but additional insurance coverage in case of an emergency. Other types of insurance include:
– Life Insurance: Benefits my include income following the death of a loved one who provided financial support.
– Disability Insurance: Benefits could replace a portion of your income if you are unable to work for a period of time.
– Long-Term Care: Benefits help pay for the care you need when you can no longer care for yourself, like home health aides, adult day health care, assisted living facilities, nursing home care and more.
Check with your financial or insurance professional to determine what types of policies and what level of coverage are appropriate for your situation.
Make it a goal to set aside cash in an easily accessible account to help you get through tough times without the need to “cash out” investments or tap a credit card. Financial advisors recommend saving three to six months’ worth of living expenses. During times of economic uncertainty, consider saving six to twelve months’ worth. Don’t worry if you can’t set aside that much right now because you can start saving slowly. Aim for three months of expenses. Once you achieve that goal, keep going! Whenever you are expecting a tax refund, bonus or unexpected money, add the cash to your rainy day fund. Then, once you’ve accumulated the amount you want to save, keep the cash in your rainy day fund and don’t use it unless there is an emergency.
Regardless of your circumstances, be sure to have these basic legal documents in place to help ensure your wishes are known and can be carried out if something happens to you. Basic documents should include:
– A Will: A legal document that allows you to control who gets your property, who will be the guardian of minor children, and who will manage your estate upon your death. Without a will, the laws of your state will dictate what happens.
– A Living Will: A legal document through which you are able to appoint a person to make medical treatment decisions for you in the event that you are unable to do so on your own behalf.
– Power of Attorney and Health Care Proxy: These documents authorize other people, whom you select, to make financial / legal and medical decisions, respectively, on your behalf if you become unable to do so.
Remember that once you have your emergency plan in place, be sure to review it regularly, especially when you make a life experience change. Life experience changes include getting married, becoming a parent, or changing jobs. Any life event could prompt a change in your emergency plans.
This post was inspired by Genworth Financial. All opinions expressed in this post are 100% mine. For more information about long-term care, visit the Genworth Financial website.