Providing For The Future


Family money management starts with budgeting, eliminating debt, and saving. From there on, good financial planning for your family must include providing for the future. This is how the faithful steward obeys an important biblical mandate, thereby avoiding potential financial crises.

“Go to the ant, O sluggard, and observe her ways and be wise, which, having no chief, officer, or ruler, prepares her food in the summer, and gathers her provision in the harvest.” Proverbs 6:6-8

A person who plans well is wise, for he can see dangers ahead of time
and avoid them. Conversely, it is foolish to rush ahead without planning
for contingencies, doing instead what feels convenient, and paying a
great price down the road.


AREAS TO CONSIDER IN YOUR PLANNING AHEAD


Emergency Savings
– this is the one of the best and most important ways to provide for the future. Its sole purpose is to get you through an emergency, so that you don’t have to take on debt in order to survive the tough times. It may be a job loss or a prolonged illness. It could be having to care for an ailing relative. In any case, having a solid Emergency Savings in place is the smartest thing you can do to provide for your future, and is the first area in which to start doing so.

Retirement Planning – this is how we use our income years to prepare for the time when we can no longer work. People typically live longer today than in times past, much longer than when the retirement age was set at 65. It used to be that a person wasn’t expected to live much past that age, but today it is quite common to live another 30 years beyond that. It is essential that we financially prepare for that time.  Personally, I use an investment vehicle called closed-end funds for that purpose.  You can read more about that here.

College Savings – the cost of education is very high, and only gets higher. A good education is essential for a successful future for our children. Planning for it in advance will help soften the financial blow that it will inevitably cause. This, however, should take a backseat to your retirement savings, because your children can find other means to pay for their education, but you must plan to take care of yourself financially in your old age.

Life Insurance – this is a means of providing for the future for your family in the event of your death. This is very important if you have children, or if your spouse is unable to financially provide because of health reasons. Life insurance gives your surviving family members peace-of-mind by replacing all or part of your regular income, so that they are not suddenly left to make it on substantially less, while, quite possibly, your spouse faces parenting alone as well.

Income Investing – this is another way to provide future income for your family, whether as a means to bridge lean years, beef up your annual income, or to eventually replace your working income. This, or course, takes time and patience, and should be done with a specific goal in mind, and not just for the sake of accumulation.

Saving for a Large Purchase – this is important to plan for in order to keep you out of debt, because debt undermines your attempts to be in control of your financial future. This would be for purchases you foresee in the next five years or so, be it travel, purchasing a car, new furniture, updating your home, etc. This should not be done through stocks or stock funds, but through a safer savings vehicle, like a money fund or CDs (certificates of deposit).

Paying Off your Mortgage – I decided to add this to the list because, once your mortgage is paid off, even if you find yourself in financial chaos down the road, you still have your home. That peace-of-mind alone is worth so much! Also, the funds you had been paying toward the mortgage will serve as a surplus you can use to put toward other ways to provide for your future. You can also potentially save tens of thousands of dollars in interest! This then becomes a triple-play in securing the financial future for your family.

A Dream Goal – while this category isn’t about avoiding financial catastrophe, I’ve included it here because a dream goal, too, should be planned for in advance. Naturally, the other categories should take precedence over this one. But it’s when you have the others well-in-hand – when you’re no longer tossed about by every financial wave that comes – that you can put your dream into practical steps. Perhaps there’s a long-term goal you’re aiming for, like a 6-month travel excursion, starting a business, or moving to Nicaragua – those “someday” kinds of goals and dreams. It may be ten or twenty years away, but perhaps before you plan to retire. If you have that kind of goal, start planning for it now.


Providing for the future, while essential in your long-term plan,
most likely will have to start small and will seem excruciatingly slow.
But, bit by bit, it will blossom and grow, and
your efforts and faithfulness will indeed be rewarded.


Be patient.

Know your destination.

Keep plugging away.


Planning + Persistence + Purpose + Prayer =
Your recipe for becoming an ever-faithful steward!



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see also:

Your Emergency Fund

Providing Future Income with Closed-End Funds