Protecting Income, Assets & Loved Ones

If you look at your financial life and ask yourself what will help you sleep at night, you may say that you want to grow your income.  You’re probably also thinking, whether you realize it or not, that you want to protect that income. We are here to help you design a healthy financial life, and that includes helping you protect your income and assets.

If the pandemic has taught us anything, it’s that things don’t always go as planned.  Life will throw us curveballs, and although we can’t predict all of them, we can try to plan for the unexpected.

Tip #1: Protecting Your Assets

If you own or plan to own a home, it will probably be your biggest asset. You will likely spend money on a mortgage, but in order to maintain the value of the house, you may also have to pay for its upkeep.  So, when you buy a home, don’t just consider the initial costs to buy it, but also consider the yearly costs to maintain and protect its value and protect against loss.  If you have other assets, like a car, an RV or a boat, you will want insurance to protect the value of those assets as well.   Most states require that you carry car insurance at least at a minimal level.  You will probably want more coverage than the mandatory amount if you can afford it.  Liability insurance is also important to protect you if you are sued.  Talk with your Money Coach or an insurance agent about umbrella coverage to see if it makes sense for you.

Whether you already own your home or plan to own one, protect your financial future by creating a budget and setting aside savings that take the costs of homeownership into account so that you prepare for the unexpected and avoid putting your home at risk.

Tip #2:  Health, Life & Disability Insurance

Protect yourself by carefully considering your options for health insurance to make sure you have enough coverage for yourself and loved ones.  Even an unexpected visit to the doctor or an emergency room visit can be a strain on your finances if you don’t have adequate coverage.

If loved ones rely on you for income, and you suffer a major illness, disability or death, what would happen?  Often, we want to make sure that those close to us are taken care of financially.  If you would want them to be able to pay off specific debts, like a mortgage or a car loan, or even fund goals like paying for college, then life insurance might make sense for you to consider.  Disability insurance can also help protect you by replacing at least some of your income if you can no longer work.

Tip #3: Emergency Funds

The pandemic taught us that having money in case there is an emergency is really important.  Many people live paycheck-to-paycheck, but that living-on-the-edge can create financial stress if something unforeseen happens. Try to get into the habit of putting a certain amount into a savings account each month. Think about being able to cover several months of no income as well as those unexpected emergencies.

Tip #4: Every Little Bit Counts

If it makes sense for your situation, you might want to consider taking on a side hustle to earn some extra money.  That money can be saved and added to your “rainy-day” fund in case of an emergency or loss of a job. Your side hustle doesn’t have to be looked at as a hardship.  You could be excited to use some of your talents to teach or coach others and make some money at the same time. It could even be inspiring and fun. The whole family can get involved.  You could bake or make crafts and sell them at local farmer’s markets or craft fairs.  Your kids could help to organize yard sales.  Your kids can earn a commission on what is sold, and you can earn money from what you contribute; plus, your garage or attic gets cleaned out at the same time.

Tip #5: Build Your Own Skills

Investing in yourself is a wonderful form of insurance if something happens to jeopardize your income.  Research and learn skills, for instance, that could help you to maintain your edge at work.  This knowledge can help you to become more relevant, not only in your current job but also in the future if you have to pivot to a new career.

Tip #6: Legal Documents

Legal documents can allow you to designate the person you want to take care of your money and assets if you cannot. Planning ahead with your legal documents can be an inexpensive and reliable protection for you and your loved ones, but talk with an attorney about what makes sense for your situation. For example, if you become incapacitated, having legal documents in place can allow you to identify a person that you’ve designated to carry out your wishes.  It can help your loved ones to protect your assets and provide instructions for moving forward.

A really important legal document to consider is a will.  It states what your wishes are after your death. When someone dies without a will, it’s called dying intestate, and the court will follow the state intestacy laws. While it depends upon the state you live in, in general, the court will decide how to distribute your assets.  But the court may not protect your assets and loved ones the way you would want. Having a will is important if you have assets that you want to pass along to loved ones. You can choose the people you want to receive your property, and you can also nominate guardians for your minor children. That is really important because if you die intestate, your kids could be placed in foster care before a relative can be located.  Check online or with your attorney for which legal documents you need to protect yourself and your loved ones.

Tip #7: Talk to a Money Coach

We are here to help you every step of the way to understand how to protect your income and assets.  We invite you to set up an appointment with one of our Money Coaches. Whether you want to plan ahead for the unexpected or you’re dealing with the unexpected right now, you can talk to a compassionate and nonjudgmental Money Coach about how to move forward.

About the Author

Neale Godfrey is a New York Times #1 Best Selling Author of 27 books on empowering families (and their kids) to take charge of their financial lives.