I Know Why You’re Broke!
I know why you’re broke. It is said that “A failure to plan, is a plan for failure.” Chances are you never planned to be wealthy, nor have you planned to not be broke! How often do you plan for the future? Too often we are not proactive when it comes to death as it is not the most exciting thing to think about. 95% of people have poor finances and if they were “called home” today their family would be buried in debt. Don’t put your family in the uncomfortable position of having to pass the hat around, or in a position where they have to start a GoFundMe account to bury you. One thing in life is certain and that is that we all are going to someday leave this Earth. Do your family a favor and PLAN for the future. Here are my suggestions on Smart Finances.
Get Life Insurance. This is how you begin to change your family tree and leave an inheritance. Life Insurance is nothing but a way to “Purchase” money today at a discount. Here is what I mean. Let’s say for example it costs you $100/month for $100,000 of Life Insurance Coverage with a 30 year term. That would have cost you $1200 for the year and a total of $36,000 over the life of the Term, however if you were to pass away in year 29, that’s over $64,000 you family would have gained (Not taking into account you earning any interest on that money). A $100,000 lump sum would make a HUGE difference in my home, I don’t know about yours. Let me ask you, how much money do you want your family to have when you leave this earth?
Get A Will. Too often families not only mourn the lost of their loved ones but they also fight and bicker with each other over the deceased belongings. It can be as big as the house or as little as some pictures in a photo album. Additionally if you are not married who do you want to raise your children and who do you want to handle any money you leave behind? Often times these are not the same people. The person who is best with caring for your child(ren) might not be the best at handling finances.
Discuss Finances. Usually it is one person who handles all of the finances in a marriage. Whether you are married or not you should discuss finances with the family. So if you have kids it is vital that you talk to them about the importance of Life Insurance. Let them know that this is the family’s inheritance. Let them know that they are expected to also get some life insurance when they turn 25 years old. Paint a picture of what things will look like 3-4 generations down the line as each generation get more and more life insurance. Life insurance money should initially be allocated towards 4 categories.
Death – Final expenses/Burial
Income – A replacement of your monthly income. (This figure should be your Monthly Income number Multiplied by 100)
Mortgage/Debt – The amount of money it takes to totally eliminate all your debt
Education – This should be the money to pay for your children’s’ education so that they don’t have to accumulate student loans.
“When you know better, you can do better.” Don’t continue to let procrastination get the best of you. We all know our birthday but no one knows their death date. Be a responsible adult, be the one to break the generational curses. Get your finances in order.
Author: Warren Edwards
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