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It’s often easier to focus on the here and now, but when it comes to family finances, it’s good to start future proofing early.
Making sure your finances are working towards your future gives you peace of mind that you and your family will be financially secure in the years to come.
Here are some simple steps that will help to future proof your finances.
Use a budget
Creating a family or household budget is a great way to really get a handle on your finances. It can help with understanding your spending, working out exactly how much money you need, and figuring out where you can make savings.
Build an emergency fund
Setting aside money to build an emergency fund can be a vital step in future proofing your finances. Even just putting small amounts into this fund each month can build up over time into a healthy emergency fund. Knowing you have the money available to deal with unexpected financial hits such as a boiler breakdown or car repair not only gives peace of mind, but means you won’t have to take out credit to get by which can help avoid entering a circle of debt.
Get life insurance
It’s not something we like to think or talk about, but taking out life insurance from providers such as Future Proof, is an important part of making sure your loved ones are financially secure if you were to pass away. Small monthly payments now could make a massive difference. You can also get covered for critical illness, so your finances are protected if you’re unable to work.
Get out of debt
If you do happen to have debts, dealing with them as soon as possible is a key part of financial future proofing.
This might involve things like cutting down or reassessing your spending or even seeking advice from a specialist to help you.
Look at paying off your most expensive debt first – this may be a credit card with large interest payments or an overdraft with a daily payment. It may take a long time and feel like small steps, but getting out of debt is possible and will help you become more financially secure.
If you’re struggling with debt and need help or advice, there is plenty of non judgemental support available – consider reaching out to somewhere like debt charity StepChange.
Make a will
Following on from that, making a will is also an important part of financial planning, especially if you have children or family you want to make financial arrangements for.
Pay into a pension
Paying into a pension is yet another great way to prepare financially for retirement. You can pay out of your salary (pre-tax) and a lot of employers will also add money to your pension when you join a workplace pension scheme so it can be extra beneficial. There’s no set amount you have to pay into a pension, so you can choose the amount that suits you.
Save or invest
Building up savings is another way to look after your future finances. Whether you choose to save into an ISA, pay into a Junior tax free ISA for your children or invest in stocks and shares, making savings now is definitely something your future self will thank you for!