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7 Key Points to Implement When Planning Your Family’s Finances Efficiently

We cannot predict the future but can certainly plan for possible scenarios that may cost a huge sum of money. You might have a number of ways to plan the protection of your family’s finances, though. You cannot be sure about all of them to be worthy when needed. This article discusses 5 key planning principles that help you to protect your family’s finances in the long run.

The five key planning principles to protect the family’s finances are tested ok and work well for the intended goal.

Want proof?

I have personally used this checklist to protect my family’s finances.

  1. Maintain a Diversified Portfolio

There is a wide range of financial products and assets, such as savings accounts, life insurance, CDs, bonds, annuities, and stocks. Every such product serves a different objective and involves a certain amount of risk according to a variety of economic conditions. It is very important to include a wide variety of these products in your financial portfolio. And, the perfect way is to combine insurance protection, investment management, and asset allocation. This will save your money against the impact of market fluctuations.

This is true that diversification alone cannot assure protection and profit against market losses but it does contribute significantly.

family picture

  1. Insure Your Family Members

Health is wealth indeed. And, life is risky at every step taken forward or backward. In such a risky environment, you must consider insuring the health of your family and you. A family health plan is the best option to go for, as it provides coverage to all members of your family, including your spouse, children, and dependent children.

In order to purchase the best health insurance for your family, it’s advisable to explore multiple policies offering similar coverage. Compare them online and check on the premium payable for each plan. Purchase a policy that suits the best to your requirements.

  1. Preserve Your Future Assets

Always prefer to preserve the assets and resources you have bought for your retirement. Though you are permitted to withdraw funds from these assets and resources, it will cost you additional taxes and penalties. In case you withdraw funds from your retirement investment, make sure you replenish the funds that are lost as soon as possible. Else, you may own fewer assets when the market comes back to the normal state.

  1. Keep a Long-Term Perspective on Your Financial Future

Market trends do vary. So, rather than taking risks, it is advisable to build an effective portfolio with an emphasis on long-term investment strategy. This strategy will help you to shape your retirement and fulfil your future financial needs.

You can take help from a financial professional while planning for protecting your family’s financial future. Get the knowledge of financial and insurance products, which will help you to take better decisions in the future.

  1. Carefully Manage your Risks

It is wise to manage your risks carefully because before it becomes too risky and when markets look unsafe. You must balance the risk involved in investment products with other financial assets that offer guaranteed income on retirement.

Make sure you check the financial potential of the company before you finally invest. Always remember that many investment products do not offer guaranteed returns. Their returns and values fluctuate according to the market fluctuations.

  1. Don’t Chase the Latest Financial or Investment Fads

Although it is very inviting to invest in the latest or different fastest growing financial assets, it’s important to review your strategies with your financial professionals regularly. Make sure your financial needs and objectives meet by investing in these products.

Logically, if your current assets are safe and enough in number, it’s best not to bother them.

Related-: Health Insurance Section 80D Deduction for A.Y 2016-17

  1. Meet Expectations of Your Family Members

If your family is financially dependent on you, then you have a number of expectations to fulfill. Along with taking care of the present needs of your family, it is also important to plan their future requirements. As a parent or guardian of a child, you better understand their future needs. Like any other parent, it is natural that you would want to give your child the best of everything. So make sure you start planning things in such a way that they get everything when they actually need them.

Conclusion

Being a responsible partner, you should also take care of your spouse. Start investing for your retirement so that you don’t have to be dependent on your kids for your financial needs.

A lot of people search online for the right investment plan that can help them to protect their family’s finances. It is advisable to take help from one or more agents of different financial organizations to end up investing in a product that offers higher returns.

Abhay N

Author : 

Abhay is the founder and managing editor of India Microfinance. He is passionate about microfinance, financial inclusion and social entrepreneurship in India.

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