Becoming a mother is so transformative that it changes the way women view life. With new responsibilities, the things you once considered unnecessary – like life insurance – becomes an necessity. As you consider the financial well-being of your little one, here are 4 essential strategies for achieving long-term financial stability and peace of mind.
1. Identify financial goals
Like any financial journey, start by assessing what you want to achieve in the short term (paying off debt or setting up an emergency fund) and in the long term (saving for your child’s education, saving for retirement). However, vague objectives like “save money” or “pay off debt” aren’t enough. For goal setting to be effective, here are some points worth noting:
• Be specific – Define your goals. For example, if your goal is to pay off debt, then your objective should be as specific as “pay off $5,000 in credit card within one year.”
• Make it measurable – Quantify your goals in terms of timelines, amounts or percentages. This will help you track your progress and adjust your strategy.
• Be realistic – Consider your financial situation when setting goals. While it’s good to aim high, when your goals are beyond your means it could only lead to frustration and disappointment.
• Make it relevant – Make sure your goals are aligned with your values, priorities and long-term objectives.
• Set deadlines – Set a timeline for achieving your goals. This will motivate you to take action and stay focused.
• Prioritize – Identifying which goals are the most pressing or have a significant impact on your life will help you allocate your resources effectively.
• Stay flexible – Circumstances change requiring adjustments to your goals. Be open to revising your goals in response to new priorities or challenges.
• Stay committed – Establish habits and routines that would move you toward your goal such as budgeting, saving, investing, and monitoring your progress regularly.
2. Set a budget
Managing the household demands juggling expenses, income, and savings. The key to this is having a detailed budget. Start by calculating your monthly income, including other sources of income such as bonuses, tips, child support, and alimony. Then, list all your monthly expenses, both fixed and variable. Set spending limits and don’t forget to allocate funds for savings and debt repayment. Whether using a budgeting app or a good ol’ ledger, make sure to track your spending to know where your money goes and to help you make adjustments.
3. Build an emergency fund
When unexpected expenses arise, such as medical emergencies, car repairs, or job loss, having
an emergency fund helps reduce the stress of borrowing money for life’s many uncertainties. Financial experts recommend an emergency fund equivalent to 3 to 6 months of expense. This provides a solid financial buffer should you face sudden expenses all at once.
4. Get insurance coverage
Ensuring your family’s financial needs also means getting life insurance coverage. In the event
you pass, your life insurance can pay for funeral expenses and provide financial support to cover lost income. It can also cover childcare costs, pay off debts, fund your children’s education, or provide a source of income for your spouse during his retirement years. This is true for permanent life insurance such as whole life, universal life, variable life, and indexed variable life. Not only do these types of insurance cover death benefits, but they also earn cash value which can be accessed through withdrawals or loans – even before the policyholder’s death.
Juvenile life insurance is no different. While it’s not a popular financial tool as parents want their
children to live long, productive lives, one should not ignore its benefits. As it accumulates cash value over the life of the policy, your child can tap into this for their college fund, pay off debt, or even pay for a car. Premiums for this type of insurance are lower since children are young and healthy. Should your child develop health conditions later in life, you both enjoy peace of mind knowing that their juvenile life insurance provides them financial protection.
To know more about the benefits of permanent life insurance and juvenile life insurance. Call
our Mercado Global Brokers and they’ll be happy to assist you in finding the best insurance coverage that fits your financial plan. It’s our little way of saying, “We love you, Mom!”
