I want to share with you a recent experience of a client who chose me as a partner in her financial journey. A 35-year-old full-time-mom to an 18-month-old kid, she had lost her spouse six months ago to covid-19. Her spouse, who held a salaried job at a financial services company, left her with a sizable life insurance claim amount to help her tide over this unimaginably difficult phase!
And yet, as we started to chalk out her expenses over her lifetime (being as conservative with the assumptions as we reasonably could), we found she needed to bring in an additional monthly income, starting within the next five years, to sustain her current lifestyle and comfortably meet all her life (financial) goals.
Being a full-time mom too, I found myself taking away so much from my client’s story. I felt like sharing six key takeaways with you.
If your full-time job is taking care of your kids or managing your home (important but unpaid work) and your spouse is the one earning an income, I invite you to:
First and foremost, own and embrace your decision. Full-time child care and home management are intense jobs! Parents and spouses around the world understand why you’re in it and what it means for you.
Negotiate a monthly compensation from your earning spouse. This is YOUR money. Save some of it. Invest some. Spend some on yourself and on what’s important to YOU. Gift some.
Visualize your home as a company. Make sense of all the assets you own and loans you owe as a household. Take stock of how much money comes in and goes out every year. Keep track of your money. Because both the jobs you do, whether paid or unpaid, are helping you run your home, pay for all of your needs and wants, and invest in all of your futures.
Sit down with your spouse and have a conversation about what happens financially if either of you dies (there’s no better way to put this!). Here are some of the questions to think about. If it comes to that, is the life insurance cover sufficient to meet your expenses for the next ten years at least? Is there an emergency fund to resort to till the life insurance claims kick in? Do you know the recourse for your loans outstanding, if your earning spouse is the primary borrower? Have you written wills? Are the nominee forms filled out for all your savings and investments?
If you want to sustain the lifestyle you currently have and meet all your goals comfortably, life insurance claims may not last you a lifetime - especially if you’re young and have a long life ahead of you! Think about what you need to be doing to be financially independent. Set yourself a financial independence goal and start working towards it from now.
Remember money buys you time to focus on what matters most to you. While you think of ways to work for money, also think of ways to get your money to do the hardwork for you!
Coming back to the client I spoke of at the beginning. I love how she has taken on the challenge to get financially independent in the next five years. She is brainstorming business ideas and ways to upskill.
I am grateful for all that I have learnt from her. I feel happy to be of help to her as her Financial Fitness Coach.
I will be happy to help you too, to think through all of this, in a space that is confidential, non-judgemental and focused on YOU. You can book a free session here.
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