We started this month’s challenge by getting you thinking about the path to being financially prepared for life’s unexpected turns.
Now that we’ve had a chance to get familiar with the mindset of learning to “expect the unexpected,” let’s wrap things up by prepping ourselves to take action.
Armed with a positive attitude and a desire for peace of mind, we started to ask some exploratory questions about assets, dependents, emergency funds and our parents’ retirement funds.
Here at stnce we recorded our responses right along with you, and what we learned when discussing some of our answers is that our financial backgrounds and relationships can vary.
Which probably means our priorities are different too.
Whether our individual next step is a will, estate planning or life insurance, getting the right information is key, so let’s take a closer look at what it all means!
Getting Acquainted with Peace of Mind
The amount of information to absorb when it comes to creating a will or establishing power of attorney can sometimes feel overwhelming.
The good news? We’re here to help.
For us, whenever we’re learning about something new, we like to distill the larger topic into digestible bits of information.
So let’s try it!
A will is a legal document that lays out how your estate will be divided in the event of death. The first thing we might think of is division of assets, but your estate also includes liabilities. A great place to start before beginning the process is to look into the estate laws for your province or territory.
Power of Attorney for Property
This legal document gives one or more person(s) the authority to manage your money and property in case you become unable to do so. The power of attorney will be in charge of everything from day-to-day finances to overall financial planning. As you consider whether it’s the right choice for you, explore the Government of Canada’s page on what to know about powers of attorney.
Estate planning and wills can sometimes seem interchangeable, but estate planning goes beyond a will by exploring other complex decisions like— how to hand over the reins of a family business, funding education for children or grandchildren, or focusing on leaving money towards a charitable cause. If this seems like a step that might be right for you, check out the Globe and Mail’s guide to estate planning.
There’s health insurance, car insurance and home insurance, but the type that we might not have thought about yet is life insurance. In the spirit of preparing to expect the unexpected, life insurance can be a great way to know that your dependents are looked after in the case of an unforeseen event. The most common questions usually surround the size of the policy and how much it will cost. To make things a bit clearer, you can start by comparing life insurance rates.
When it comes to an emergency fund, even when things are going great it’s good to have a back up. These stored away savings are your peace of mind should you experience a change in employment status, health issues or unexpected home repairs. You may have heard that three months’ net income is how much you should save, but the real answer depends on you. From tracking your monthly expenses to considering whether you own or rent and the size of your family, check out this helpful guide on building an emergency fund.
Now that you’re armed with some helpful resources, you have more information that can aid you in being financially prepared for life’s unexpected left turns.
Open the Conversation
Once you feel like you’ve got enough information to take the next step, remember to discuss your options with your family! Each of these avenues is inextricably linked with the people in your life, and by discussing it together you can increase the likelihood of making decisions that lead to a collective peace of mind.
You’ve learned a lot today (well done!), so take a break with our relatable Ask Lisa column, for some expert and approachable financial advice.
We’ll see you soon for our next challenge that celebrates the last splash of summer (with some savings too!)