For all of us how we handle our personal finances is important. In fact how much money we have at the end of our working lives is determined by how well we manage our money. How hard and how early our money starts working for us is important to determine our net worth. Good financial planning ensures stability for the family. However, military families face some additional challenges. This is especially more true when the family member is posted in a far away location – and you cannot sms for everything you need! For this reason it is especially important for members of the military to not put off getting their finances in order. For this purpose let us look at what a person in service MUST do to reduce the stress for himself and his family.
1. Have a financial plan in WRITING: All of us need a plan which encompasses our financial goals, the time frame in which to achieve the goals, the products chosen, however it is more critical for the service person. Remember if you are away on the front and your spouse cannot handle the financial affairs for some reason, a third person will be called into play.
2. Have an emergency fund: First there should be some money available for meeting your day to day expenses in case of an emergency. More importantly it should be in a place that your spouse knows and can access. It should be an either or survivor account – and not a joint account. It may sound simple but it is important. If you have kept it in a money market (liquid fund) make sure it is anyone or survivor. Make sure it has a nominee and the nominee is current!
3. Ensure that your spouse is net savvy and can check the bank statement, mutual fund balance, equity shares, etc. Of course taking your wife along with you to every place you go and teaching her the basics is a MUST. Help and guide her and make sure that she can do all the transactions WITHOUT you being around. Prepare her for the worst, that is your job!
4. Help her by keeping all the documents she is likely to need in one place – and tell her and the kids about it. This should include your mail password, your life insurance papers, other investment papers, power of attorney, – and all other financially relevant documents.
5. Designate a power of attorney for yourself and your spouse. Just in case something happens to your wife and you are unable to rush – somebody has to take care of your immediate family. This could be your brother, brother-in-law, friend, Chartered accountant, – anybody whom you can trust.
6. Update all your nominations and wills. If you are a divorcee make sure your nominations are current. If you have recently had a kid or one of your kid needs special help all that is mentioned clearly.
7. While investing it is nice to sometimes have guidance. Check whether you need guidance to make investments, file income tax returns, etc. Such help may be difficult to get in remote areas – try reaching through the net.
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