Have you ever stopped to think that this historic pandemic has given us eye-opening lessons on the importance of preparedness? We saw that preparation is key as we witnessed how many lives were turned upside down. People were not ready to deal with sudden losses and simultaneous surprises because they were accustomed to live life one day at a time. Our quarantine life taught us that the best way we can be ready for anything is by protecting ourselves, our family, and our hard earned savings from a worst case scenario.
When it comes to shielding ourselves from life’s grim surprises, there’s no better people than the experts who studied on these matters. AIA Philam Life CEO Kelvin Ang and AIA Investment Management Head of Funds Shrikant Bhat recently shared their five important tips – gained from their personal experience as fathers – to make sure the family’s finances are well managed and secure during these challenging times.
#1 Know your why
When setting a financial goal, one first and important aspect is to know the reason behind this goal as your source of inspiration and motivation. For parents, this is usually their children. When they are tempted to deviate from their goal, they only need to remember that they are doing this to fund, for example, their child’s education. And that’s enough reason to strengthen their resolve to stick to their goal.
Kelvin shares with us an important lesson he learned when it comes to family financial planning. “Building up your savings can be a big challenge especially while taking care of the family, so it’s important to establish your reason why. Your purpose for saving must be clear and emotional. Without a good reason why, it will be hard to exert self-discipline and motivate yourself. Knowing your why will help you be more focused with your goals and plans.”
#2 Ask help from the experts
Another important tip in making sure the family’s financial plan is set in place is seeking the help of professionals, and for this matter, financial advisors. Their experience will save you time by giving you the right information you need when it comes to managing your finances.
Shrikant emphasizes the importance of consulting experts to help you prepare and eventually implement your investment and savings plan. “It is vital to understand one’s life stage, financial situations, goals and investment horizon before setting foot to plan and invest.”
#3 The best time to start is now
Shrikant stresses the importance of getting started and being open to trial and error at the start. “It is normal if one is unable to fulfill or implement all your plans at one go. What is more important is to get started and review one’s plans along the way. This is what we term as ‘Start Small, Start Now,” he shares.
Financial planning takes time and the family’s situation may change or evolve, such as when the kids start growing and other needs have to be considered. Shrikant adds how over this period of time, the family can put more resources into planning and revisiting the family’s plans.
#4 Always look at the long-term
When it comes to family finances, long-term planning plays a vital role. It may be a long shot and requires years of saving and hard work, but this is one way to ensure that you are actually achieving your goals for your family. Having a long-term plan also allows you to build your short term plans.
“A common mistake many individuals commit while planning for their family is to focus on immediate goals such as your children’s education or buying a house and neglecting planning for the longer term goals such as your own retirement,” Shrikant shares. He stresses that long-term planning helps us see our goals come into fruition.
“The effect of compounding over time is our greatest ally to get us to where we want at the end of the day. Which is why every family should apportion their financial resources and start planning to move closer towards the different goals they have set for the various stages in their life,” he adds.
For Kelvin, he highlights the importance of setting aside your savings for the long term and staying disciplined, which will be worth it in the end. “Choose a savings vehicle that will compel you to have ‘forced savings’, one that will discourage withdrawal until needed. Saving and investing in the long-term will minimize risk and maximize return.”
#5 Be prepared
Lastly, one important tip is to always be prepared by setting aside emergency funds for unforeseen events. The general rule of thumb in building a sound financial plan is to set aside between 3 to 6 months of your family’s monthly expenses. This way, the family’s cash flow is protected and secure even when the unimaginable happens.
A Secure Family Financial Plan with AIA Philam Life
Another tip in being prepared is to find the right tools and vehicles to keep the family’s finances safe and secure like AIA Future Builder, a new variable life insurance plan which helps parents protect their future, no matter what life brings. This plan secures and grows their hard-earned savings for the future while protecting them from risks.
With AIA Future Builder, families can maximize their savings potential with the option to diversify their investments through either locally managed or globally exposed funds. The plan also comes with basic insurance protection for life, total & disability, and personal accidents as well as additional benefits through optional riders.
On the side, parents can also enjoy wellness benefits as AIA Future Builder is powered by AIA Philam Life’s science-backed wellness program, Philam Vitality. Through this program, parents who are able to sustain healthy habits are incentivized with additional cash benefits and other rewards. At the same time, the product is also easier on the family budget through its various payment terms, with 5, 10 or pay-to-age 65 variants.
With these simple tips in mind and a perfect partner in AIA Philam Life, families can enjoy Healthier, Longer, Better Lives through a sound financial plan with AIA Future Builder.
To learn more information about AIA Future Builder visit philamlife.com, email email@example.com, or call (02) 8528-2000.