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For the majority of working adults in Singapore, holding a steady, well-paying job is a necessity in providing for both their future and the future of their families.
But whether you own your own business or are part of a large multibillion-dollar company, financial security neither begins nor ends with how much money you make at the present.
Through working hard and working to continually advance in your position and move up the corporate ladder, you may be able to give your family all the comforts they need. Unfortunately, present comforts do little in terms of future security. Unforeseen accidents, loss of job, sudden illness, and other incidents can threaten your family’s financial future.
In order to truly provide and care for your family, here are four things that you can do today to secure your family’s financial future.
Saving is an important part of any financial plan. Although it can be difficult at times, sufficient savings can come in handy, especially in emergency situations. Having a savings fund that is enough to sustain at least six months of bills and expenses will protect your family in the case of an emergency that cuts your monthly income.
Although this may take some time, having this emergency fund creates a cushion of security and peace of mind. Consider how much your family spends monthly in bills and expenses and make sure to include household bills, debts, car expenses, and school/educational needs. If that number is around $2500, then your family should have at least $15,000 set aside.
While this may seem like a great deal of money, it is a necessary sacrifice. Money put away and saved immediately is money that can be lived without. Take a percentage out of each month’s paycheck and stash it away. In the even that an emergency does occur, you will be happy that you can still pay bills and provide for your family.
Several families worry that 6 months of savings is not enough. In this case, make a financial plan with your spouse to have 9 months or even an entire year’s worth of expenses saved and set aside. This can be a lofty task and take some time. For this reason, plan to have at least a foundation of 6 months off from which to build.
One of the most detrimental incidents for a family is a sudden illness that incurs significant medical bills. Since healthcare expenses are costly in Singapore, sky-high medical bills can cause serious harm to your family’s financial status. By ensuring that your family has good medical coverage, you are protecting them both their health and the family pocket book.
A private medical coverage policy such as AIA Healthshield Gold Max is an Integrated Shield Plan. These plans cover not only the cost of treatments and hospitalization, but they cover any hospitalization and emergency bills as well.
In some cases, there is a need for sufficient health coverage due to chronic illness that cannot be taken care of only inside of the hospital. Plans such as a critical illness protection plan can provide reimbursement or payment of expenses in these cases and often cover bills that are incurred if you need to take a leave of absence from your job.
The AIA group has a variety of health care plans to cover various situations and give your loved ones peace of mind. A few of their more popular plans in Singapore include Early Critical Protector Life Plus, AIA Triple Critical Care Cover, Early Critical Protector, and AIA Secure Critical Cover.
Although it is not a situation that you may want to think about, it is crucial that you consider how your family will be provided for in the case that you fall gravely ill and will not be around to provide for them. Death is not only devastating but can leave a family in ruins due to unpaid bills, medical expenses, funeral costs, and the overall loss of the main financial provider. To give your family a secure future, obtain good life insurance coverage on top of your medical coverage.
Determining which financial plan is best for your family is similar to creating an emergency savings fund. First, calculate what your family’s monthly expenses will be without you. Second, take in to consideration your children and their educational and recreational needs. Third, think about your spouse and what they might need to take care of the family such as a domestic helper.
What is often overlooked at additional expenses needed by the surviving spouse. In the case of death, your spouse may need to take time off from work to help provide for the family mentally and emotionally. If this occurs, you will need to calculate in your spouses’ monthly income and additional costs. Consider having a conversation with your spouse and determining these amounts together.
Fatalities can lead to confusion and frustration for the family in regards to your estate and assets. Have a financial plan and insurance policies in plan that clearly outline the rightful beneficiaries.
Unless there is a clear will in place, your estate and assets can be legally tied up for an extended period of time adding stress and frustration to your already grieving family. If there is no will present, according to the law in Singapore, your assets will be distributed according to the Singapore Intestate Succession Act. This act leaves all assets and estate to the immediate surviving family which means surviving spouse and children. In several cases, the deceased may have wished for something to be left to the parents. Without sufficient estate planning, not all the beneficiaries you wish to receive your assets will receive their share.
Such detailed planning and preparation takes time. For this reason, begin planning for your family’s financial security today. Set up an emergency fund which has at least 6 months of bills and expenses. Purchase and set up sufficient medical and life insurance. Plan your estate and will clearly dictating all beneficiaries. Take these steps and give you and your family peace of mind.
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