Do you need life insurance?

The main purpose of life insurance is to protect someone whose finances depend on you being alive. For example, if only one of you is working, you need a policy to protect the spouse who is not earning money against the loss of income. The same applies in the case when you have a spouse that earns the majority of the household income.

Another factor to consider is large financial obligations, such as a mortgage. In the eventually of death the proceeds of the life insurance can be used to reduce or eliminate the financial obligation and leave the surviving spouse in a better position.

Five Tips For Financial Freedom

1. Establish and Control Cash Flow
The building blocks of any financial plan are liquidity (or like my wife calls it “fluidity”) and expense management. People who spend more than their income will never achieve financial independence. Your best friend is your family budget, without it you will be spending blindly which will lead you into constant shortfalls and borrowing from your savings or credit cards to cover the “unexpected shortfall”.
2. Manage and Eliminate Debt
As part of the post-recession era, families should have as their primary goal to eliminate debt. As long as our families continue enslaved by debt, we are selling our children's future to the money changers.
3. Establish an Emergency Fund
Families should have at least a three month reserve of cash for emergencies. Once you have established your 3 months of reserve, you should work towards 6 to 9 months of reserves. Emergencies come in different ways from layoffs to natural disasters to illness or death of a family member. Having this emergency fund is critical to sustain those rocky moments. For this type of funds you should avoid Mutual funds, Money market accounts and CDs. Instead go for a savings account or even cash in a safe at home, remember the key is liquidity for this fund.
4. Protect Your Assets
Another aspect we fall short in the United States is inadequate protection for our assets should a wage earner die or become disabled. Tax  planning and using retirement and savings products that offer tax protection are key. Life insurance, retirement and saving vehicles should be carefully evaluated to financial hardship should a disability or death occur.  A family trust can save thousands of dollars in probate in the event of a death as well.
5. Grow Your Wealth
Even in a down market sound investments will still produce returns that grow and protect principle. Take advantage of investment plans from reputable companies with a history of success and expertise. Avoid uncertain and extremely speculative offers. As money grows, the potential for earnings increases exponentially.

Financial freedom does not come free, it requires strong management, planning and foresight. However, with proper planning and using these basic guidelines, your journey will be more enjoyable and will yield a brighter financial future tomorrow.