It would be an understatement to say 2020 has been quite the year. It’s been a whirlwind of a year – a pandemic unlike anything we’ve experienced in our lifetime, the rise of two movements in #metoo and #blacklivesmatter, all while we brace ourselves for a presidential election unlike any other in recent history. All that’s missing to cap this year is the arrival of an alien mothership to announce we aren’t alone.
"Be Prepared.", an old Boy Scout motto that was drilled into me during my years as a boy scout. The events of 2020 have shown how important that motto still is. This has been the year of expecting the unexpected. We can’t prepare for every eventuality as no one can predict the future. After all it has yet to be written.
The tips below are just some ideas on how you can be prepared.
1. Emergency Supplies
I’m not a doomsday prepper by any stretch of the imagination but I like the idea of an emergency stash. What I do is keep a backpack with some of the supplies below so in an emergency I can quickly grab it and go. You should also consider keeping a bin of non-perishable foods.
· Flashlight(s) with plenty of back up batteries
· #Lifestraw water filter and/or Lifestraw water filter bottle
· Portable battery charger with solar charging capability
· Firestarter and waterproof matches
· Ka-bar knife
2. Emergency Fund
This is where 10% of not only yours but your spouse’s monthly income should go. When you have a family, unexpected expenses arise. Those surprise expenses can wreck a carefully maintained budget or throw off a debt repayment plan. In some cases it can lead to even more debt.
There is nothing worse than taking your child to the dentist for a routine cleaning only to leave $500 later because of surprise cavities. Or in my case my dog scratching his ear so much he burst a blood vessel in it. That was an unexpected bill right around property tax time. Thankfully having an emergency only bank account my wife and I continually fund helped ease the blow of that bill.
Let’s face it, we all need that break from the daily grind. A day off here or a day off there isn’t always enough to recharge and refresh. Not only that a trip is a great experience you can share with your family, something they won’t get spending a Saturday at home. Money is the one item that can derail a trip from even beginning. Going somewhere isn’t cheap – hotels, food, admissions, and so on. Consider setting up a joint bank account called travel. Contribute a set amount each month that fits within your budget. Set it up to be done automatically so it becomes an out of sight, out of mind transfer. This will give you a nice starting point when you begin to plan that family vacation.
This is the end game of those many years spent working. We all want to finally have the time to tackle those honey-do lists. Take that great bucket list vacation or spend time with the family. In order to do this you’ll need income stream(s) in retirement. Don’t wait until you close in on retirement to start saving. You don’t want to be in the position of retirement planning only to discover you have a shortfall so won’t be able to fully retire.
There are many retirement plan options depending on your work situation. Reach out to me to discuss further.
Determining how much and what type of coverage needed can be tricky. If you own a house and are married the minimum to consider is a term policy.
Consider a death benefit that will cover the mortgage were something to happen to you. It’ll give your spouse some much needed peace of mind during a tough period. Premiums can be affordable depending on our age and health. To get an idea on how much coverage you may need use this needs analysis.
Being self-employed can be wonderful. No boss to report to, you set your own hours, you can work with who you want. As you are self-employed money doesn’t come in unless you are working. Something could happen be it injury or accident where you can’t work. That income stream could dry up while you are out of work. An option to consider is disability insurance. Coverage and rates vary but it could provide a temporary stop gap if you are out of work for any period.
For more information on insurance coverage please reach out to me. I can put you in touch with an insurance professional happy to discuss this in greater detail.
6. 529 Plans
College is expensive, there’s no way around that. Between tuition, room and board the fees can add up, especially if you have multiple children. Consider setting up 529 Plans for each child, contributing a set dollar amount monthly or quarterly. Maximum contributions per year vary depending on the state’s 529 Plans. A great site to visit for contribution limits and other information is my529.org. When the holidays roll around your parents and in-laws may ask what to buy for their grandchildren. Rather than suggest a toy or the latest fad ask them to contribute to their grandchildren’s 529 Plans.
7. Important Papers
· Password protected spreadsheet of account locations and login information
· Will and/or Trust
· Copy of driver’s licenses and passports
· List of important prescriptions