The holiday season highlights the fact that many Jefferson County families live paycheck to paycheck, barely making ends meet. Yet other families face monetary crises after unexpected accidents. Many more simply have more pressing financial needs and goals than “planning” their financial future. The good news is that whether you are age 18 or 78, you can take steps today toward a better, more secure future. It’s never too late to start. It's only too late if you don't start at all.
Remember, no one knows what the future holds. We hope only good things are in store for you. But realistically, bad things will happen too.
Even if you don't consider yourself a cautious person, you take little steps every day to improve the odds that good things will happen and guard against the possibility of bad things happening. You wear seatbelts (I know, its the law in West Virginia!). You lock your doors when you leave home. You try to eat well and exercise.
In other words, you may not be able to control the future, but you can stand up to it. As we would say in Raleigh County (West Virginia), "You don't have to get wet when it rains. You can carry an umbrella."
True, it's easy to take these little steps. The bigger steps, though, can require contemplating some pretty unpleasant things and sometimes making some hard choices.
Listed below are some tips that I provide on a daily basis to local families to help secure and protect their financial futures:
Maintain cash reserves. Long-term savings and investments form the cornerstone of financial stability. In addition to standard accounts, develop a cash or easily liquidated reserve account for emergencies; I recommend maintaining enough readily accessible assets to cover three to six months of expenses.
Plan your estate. Estate planning involves more than writing a will; it encompasses everything you own, from property to jewelry to business interests. A comprehensive plan will also describe your wishes about your own medical care and the management of your estate; even more important, it will ease the transition and financial concerns of your family. Please contact your Jefferson County estate-planning attorney for advice about your particular situation.
Keep records current. Seemingly minor issues, such as a blank in the "designated beneficiary" line of an investment or bank account, can wreak havoc on a grieving loved one. Make sure all documents are accurate and up to date to avoid delays and legal problems.
Be adequately insured. The term "risk management" refers to the combination of insurance types that best meet your particular needs. Contact an insurance professional for advice regarding your particular situation. Standard categories of insurance include:
- Life Insurance. While your employer may provide some coverage, it is usually wise to calculate the appropriate amount you need, and if necessary, supplement this employer-provided policy with additional insurance. The types of life insurance you can choose from include "Term," which provides coverage for a set period of time and pays benefits only in the event of death. "Whole Life," "Variable life" and "Universal life" policies, which all include a savings component, are also available. The Life and Health Insurance Foundation for Education (LIFE) provides an online calculator to help determine the type and amount of life insurance you may need at www.life-line.org.
- Disability Insurance. Many employers also provide disability insurance, which helps cover living expenses in the event of a debilitating event. However, most Jefferson County families will benefit from a review of their current policies to determine if additional coverage is needed.
- Health Insurance. Major medical expenses can destroy a family's financial resources in a matter of months. If your employer offers health insurance, take advantage of it. In some cases a separate or supplemental policy will provide more comprehensive coverage.
- Long Term Care Insurance. Increasingly popular in Jefferson County, this category of insurance can shelter a family's savings and the estate of the insured in case of long-term illness or disability.
To safeguarde your financial future, you may want to consider seeking help from a Jefferson County financial planner.
Listed below are other resources that I routinely present to Jefferson County families:
Publications
Web sites
Tom Maiden is a Certified Financial Planner practitioner in Shepherdstown, W.Va. He holds a Master of Business Administration degree from West Virginia University and teaches insurance and financial planning at Shepherd University.
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