DEFINITION OF A YOUNG FAMILY
Young family is described as a heterosexual couple with one or more young children, married or living together for 10 years or less. Young families also refer to young couples and young parents. They are vulnerable and fragile. One of the main challenges for young family is finances. If finances are not managed properly things will get ugly; in this case study Finwaze will show you real incidence.
Young Happy Family
Sheila and brandon, both in their early twenties, had a 9month old boy and 6 years old boy at home. Brandon was a remiser for a stock broking company while Sheila a homemaker who takes good care of the kids.
One happy weekend Brandon decided to do some repairs for his home as the kitchen basin is choked. Half-way repairing the basin he slipped he fell, and had a concussion at his forehead, he was rushed immediately to the hospital. Unfortunately brandon didn’t survive as he suffered from haemorrhage.
Brandon had few Life Insurance through his monthly contribution, the death benefit was only Peso500,000. Sheila was able to claim this amount as the nominated beneficiary, but it wasn’t enough for her to meet all the financial obligations she now faced. There was a large home loan, credit card debt, car repayments and all the costs associated with raising two little ones. Sheila knew the insurance payout wasn’t going to last long – and she was right!!!!.
CHOICES SHE HAD…
- Sell her home and move to her siblings or parents home
- Go to work; maybe part-time or odd jobs (Which she can’t as her kids are still young)
- What other options does she have?
Sheila was forced to sell the house (but she knows in Philippines sellers market is terrible and it will take her a long time before she could sell her home) and stay with her siblings. Over the next few years, she worked numerous part-time jobs, moving to full-time when both kids were in school. It took her over a year after year to get to the point where she didn’t feel like she was drowning in everyday expenses. She still struggles financially today as a single parent.
IF YOU WERE BRANDON & SHEILA WHAT WOULD YOU HAVE DONE DIFFERENTLY?
- Buy more Insurance
- Have an Income Generating Assets
- Small Business
- Mutual Funds/ETF
Take some time to ponder this case study and ask yourself the above question again and again and again…if you ask me how – my reply is – GO AND DO A PROPER FINANCIAL PLANNING WITH A QUALIFIED FINANCIAL ADVISER!!
Article by: Ashok MBA – Strategic Coach & Mentor for MDRT/COT/TOT