3 Things Millennials Should Do Now to Financially Protect Their Family
For many millennials, the last 15 years went by fast.
We blinked and suddenly we had a family, responsibilities, and the pressures that come along with it.
And because it happened so fast, we rarely take the time to slow down and think about the future.
We still sort of believe we are invincible. But we aren't.
And it's time to financially protect our family, even for the unexpected. Here are 3 things to do now:
Fund an Emergency Account for the Unexpected
Life doesn't go according to plan. And many times, it seems to all hit at once. This is especially true with finances. So make sure you've built a cushion. It'll reduce your stress when expensive, unplanned events happen and give your family the resources to make it through tough times. Work hard to save 3 months of expenses ASAP, and then have a longer-term goal of getting to 6 months saved within the next 2 years.
Create/Update Your Estate Plan
Thinking about what would happen if you were to die isn't fun. But if you don't plan for it, the state you live in will do it for you (called intestate laws), and you don't want that. So creating an estate plan is important. At a minimum, you should create a will, power of attorney, and healthcare directive. And if you have kids under 18 (along with a variety of other situations), it's important to also set up a trust. That will allow you to put more direction and protection around the distribution of your money if you were to unexpectedly pass.
Buy Enough Basic Term Insurance
If you were to die today, would your family be ok financially? It's a brutal question, I know. But it's also a necessary one. Especially if you have kids, providing for your family is one of the foundational aspects of being a parent. And the good news is if you are reasonably healthy, term insurance is really cheap. For many millennials, 10x your income is a decent starting point, but working with a Certified Financial Planner professional to help narrow the number to what you actually need is a good idea.