Celebrate Heritage Month with us this September as we talk about the topic of leaving a legacy. That is, the things we leave behind for our friends, family, and loved ones. Leaving behind a healthy financial legacy is only possible when you start building a strong financial foundation – you can only help others financially if you are financially strong yourself.
Try out these 5 tips from WageWise to better manage your money and leave behind a healthy financial legacy:
- Plan ahead
If you fail to plan, you plan to fail. There are many ways to spend your money but with planning you can spend your money wisely to make sure you:
- Cover all your basic needs (like rent);
- Save for emergencies (such as an unexpected healthcare expense);
- Save towards your goals (for example a deposit on a home); and
- Save for retirement (so you can be financially independent).
A financial plan is called a budget and should include all your income (the money you receive) as well as your expenses (the things you spend money on). Watch our video on planning with money and budgeting.
- Get life insurance
The main purpose of life insurance is to give your loved ones some financial protection when you pass away. Life insurance can be a huge help when you pass away as it can help with things such as:
- Paying for “final expenses” which usually means your medical and funeral costs
- Covering family debt
- Maintaining your family’s lifestyle
- Supporting a child’s education
- Save for retirement
Saving for retirement is one of the most important things to think about when planning your financial future. Retirement savings are long-term savings options that give you an income when you retire and can also serve as an income for loved ones if you pass away. Because retirement is a long-term financial goal, you can save and invest your money and watch it grow over a longer period. As time goes on, you start to earn interest on interest which help you to build your wealth.
Want to see the importance of saving for retirement? Watch our video.
- Create good financial habits
Leaving behind a financial legacy doesn’t have to only be about physical items and money. Take some time to instil your good money habits on your friends, family, and loved ones. This education can help them understand the value behind money and how to make the most of it themselves. When it comes to children, it’s always a good idea to teach them from a young age as this knowledge will carry with them throughout their lives and help them better manage money. Just remember to keep it simple.
- Set up a will
A will is a legal document which allows you to distribute your assets afters death, appoint guardians for minor children and specify your funeral wishes. Having a will is really important as it means you, rather than someone else, get to decide what happens to your things when you pass away. A will is also important as it lets you leave things to friends, family, and loved ones that can make their life easier and reduces some of the stress placed on them.
Read our quick article here to learn more about drafting a will.