Plan your death! From a Financial Perspective.

Death is a Taboo word. We all know it is inevitable but no one wants to think about it. But rationally it does not makes sense. Take an example of a business, in a business if we know about a certain event or loss we start preparing for it through the way of provisions and reserves from the moment we get to know about it. So, why shouldn’t we do the same for our personal life?

Now the question arises how can we plan our death? We can plan our death in two ways: spiritual and financial. In this article, we will focus on the financial perspective. For the spiritual perspective, you can read the book Death: Inside story by Sadguru.

It is our duty to provide financial safety for our family in case of an unfortunate incident. The following ways will help us with the same:

Create an emergency fund:

Remember a simple rule: A portion of what you earn is yours to keep. From that portion, set aside a part for an emergency till you achieve your emergency fund goal. My rule is to have an emergency fund of almost 12 months of your monthly expenses so that in any unfortunate incident I or my family have a year to get our life on track.

Have Medical Insurance:

We would not want to utilize our emergency fund in case of a medical emergency. As a lot of other expenses come with a medical emergency so we need to be prepared for that too. For example: During a medical emergency you might not be able to work so the emergency fund should be utilized for daily expenses rather than for hefty hospital bills.

Have Life Insurance:

By paying small premiums we can provide lifetime safety for our loved ones. There are many advantages of life insurance. Thus, it must start from a young age. And go for a term plan rather than an endowment plan. 

Set aside a small portion for Pension or Provident Fund

If you are in India and you are a salaried person then you need not worry about it. As that portion is already being created by Government rules. But if you are a professional or have your own business start a Pension Account with any bank and set aside a small portion for it.

Organize your important documents

You must make sure all your financial information is reached to your family which includes details of your savings, investments, and debts or any other things related to money. Thus, organize all your documents either in the physical folder or in a cloud folder. And let some of your loved ones know about the folder so that they get an idea of your financial situation and no one will be able to deceive them in your financial matters.

Set Nominees for all your financial accounts:

For making it convenient for your loved ones, set nominees for all your account which includes Bank account, Life insurance, Medical Insurance, Provident Fund, Demat Account, Fixed deposits, Mutual funds, etc.

Make a will:

The majority of people will say “My family doesn’t require a Will”. Your family may or may not require it. But there is no harm in creating one and letting everyone know how you wanted to distribute your wealth.

Lastly, I want to leave you with a quote:

“Nothing in life is promised except death. So what’s your plan?”

The Greedy Monk