Planning for the future can be a difficult concept for many people who are struggling to keep up with their finances in the present. However, planning for the future can help ensure your financial comfort and the wellbeing of your family.
It’s never too early to begin planning for the future, no matter your age or how much your assets are worth. Here are some reasons you should begin planning for the future as soon as possible.
Protect Your Children & Family
While your plan may be to become a parent to your children for the rest of their lives, sometimes life doesn’t work out that way. If you pass away without a plan and your kids are minors, the courts will appoint a legal guardian for them. This person will most likely be a willing family member, but if it’s important for you to decide which family member, then you should have a plan, such as a will.
An estate plan reduces your beneficiaries’ tax burden. Your assets may be subject to state and federal taxes after you pass away, which means your children and spouse will have to pay money for them. An estate plan can help you pass these assets on while minimizing these taxes.
While your will is an important part of protecting your children if you pass away, so is obtaining life insurance. Life insurance allows your beneficiaries to receive financial support if you pass away. Even if you’re not the only breadwinner in the family, you can still obtain life insurance that will help support your family after you’re gone, including paying off mortgage and debt.
Protect Your Assets
Planning for the future allows you to protect your property from people you don’t want to attain it. You can do this with an estate plan or a trust that ensures your assets go to the individuals you decide on. For example, if you want your daughter to have a family heirloom, you can ensure she’s the one who gets it. Or if you have pets, you can pass them along to the proper family member or guardian in your trust.
If you haven’t made these decisions yet and pass away, the courts will determine how individuals will share your estate, including all of your assets. A family member you may never want to give any money or assets to might receive part of your estate when you pass away without the right plan.
Ensuring Your Retirement
Your assets could also mean the investments that you have made or want to make in terms of stocks, bonds, retirement funds or even Roth IRA’s. Investmenting now can really pay off in the long run, if you are smart about it and do your fair share of research.
People are now retiring later in life than in past years because they can’t afford to stop working. By planning for the future, you can ensure you retire when you want to, as long as possible. While you may not be able to retire by the age of 40, you should have a plan in place that allows you to retire by the age of 65.
A proper retirement plan should include a retirement account, through your employer or your bank, to ensure you put money away that can accrue interest so your money passively grows as you age. Another part of a retirement plan is having a healthy savings account. Your retirement account might not be enough for you to fully retire on, so you must save a little bit of each paycheck with the goal of retirement in mind.
Weddings Are Expensive
While you might be single now, you may want to eventually get married. If this is the case, then you must know weddings are expensive. Many people take out personal loans to pay for their weddings. To get an idea about how much a wedding will cost, you can look up pricing online for the different types of services and products you’ll need, such as:
- Venue
- Dj or band
- Catering
- Photographer
- Wedding dress and Tuxedo
- Honeymoon travels
Once you add up all the numbers, use this as an estimate for how much you might spend on your future wedding.
Raising Children is Expensive
Whether you’re married or not, you may have children in the future, and those children aren’t going to be cheap. According to The Plutus Foundation, “the USDA puts the cost of raising a child from birth to age 18 at $233,610 for a middle-income family (married with two kids).”
That’s over $12,000 every year. When you consider all of the things that go into raising a child, such as diapers, toys, food, and quality education, you’ll see why many millennials are choosing to have pets. However, if you’re someone who wants to be a parent, you’re going to have to start saving as soon as you and your partner decide to start trying for kids.
Emergencies and Accidents Happen
While there are some ways to prevent accidents, such as never walking on wet floors, many accidents and emergencies are unavoidable. Consider a car accident, for example. You never know what could happen to you when you’re behind the wheel of a car. If you are involved in an accident, you can expect to pay money in some way or another, even if you’re not harmed. The cost of fixing your car after an accident can range from a few hundred dollars to a few thousand.
At the same time, you can never prepare for a serious illness. Yes, you can prevent the common cold (for the most part), but you don’t expect to ever become seriously ill, injured, or disabled. Unfortunately, not planning in some way can have serious consequences. Aim to have a savings account that can at least partially cover you in case of these emergencies so you don’t end up in debt.
You Can’t Always Plan for the Future
While you can’t exactly plan everything that’s going to happen in your future, there are ways to prepare for it. Make sure you continue to work on your savings and take the proper steps to ensure your family is taken care of if you ever pass away. Yoga Teacher Training in nepal
Marné Amoguis
Marné Amoguis holds a B.A. in International Business from UC San Diego. She is a contributing writer at 365businesstips.com where she loves sharing her passion for digital marketing. Outside of writing, she loves traveling, playing music, and hiking.
