Great Expectation: How To Plan For Your Family’s Future (Part 3/3)

How To Plan For Your Family’s Future (Part 3/3)
No matter what your income level is, early planning for financial security is always the best course of action. Here, some tips on how to get started!

Click here to read Part 1

Click here to read Part 2

TIP 5: TAKE CONCRETE STEPS TO ACHIEVE YOUR FINANCIAL GOALS
With your goals identified, you can start exploring the available financial solutions to achieve these goals. For example, when building up savings for your children’s education, you could consider:

1. Putting an appropriate amount of savings in a bank deposit
2. Buying an endowment plan or investing in another longer term investment product
3. Investing long term in some blue chip stocks or funds

As can be seen from above, different financial solutions are available to achieve the same goal. For example, if you plan to buy life insurance to give you and your family financial protection against death and permanent disability, there are a few types of common insurance plans such as whole life plans, endowment plans, term insurance or investment-linked plans to consider.

You should shop around and understand the key features of each product before deciding which product best serves your needs.

CHECKLIST FOR A BRIGHTER FINANCIAL FUTURE FOR YOU AND YOUR FAMILY

1. Set up a monthly budget.
2. Set aside an emergency fund consisting of six months of your monthly salary.
3. Identify your financial goals and objectives.
4. Know what your net worth (assets minus liabilities) is.
5. Protect your family and yourself against risks such as accidents and loss of income.
6. Know how much you need for your retirement and know how much CPF savings you will have when you retire.
7. Have a proper plan to reach your financial goals and objectives.
8. Put aside some money in investments to grow your wealth.
9. Review your financial plan regularly.

Some families may be more comfortable developing their own financial plan. However, it might be appropriate to engage a financial adviser (FA) to assist with planning if you need expert advice. However, do take note of the following when engaging a FA:

1. Deal only with FA regulated by the Monetary Authority of Singapore (MAS)
2. Engage an FA with proper qualifications and experience
3. Make sure you ask for documentation and keep your documents safely
4. When in doubt, always seek clarification and ask for more information
5. Beware of verbal promises and guarantees of unrealistic returns

Remember: Ultimately, your financial plan belongs to you and your family. It is your responsibility to ensure that you understand your plan and stick to it.

You can also log on to www.moneysense.gov.sg and check out The MoneySENSE Guide to Planning for Your Family’s Financial Future for more information and tools on how to get started.

This information is provided by the Insurance and Financial Practicioners Association of Singapore (IFPAS) and Life Insurance Association (LIA) as part of the MoneySENSE national financial education programme.

Source: Great Expectation: How To Plan For Your Family’s Future (Part 3/3)