Your finances and growing a family. By Richard Lishman

YOUR FINANCES AND GROWING A FAMILY

From Student to a Qualified Experienced Dental Technician

(Part 5 of 10)

By Richard T Lishman Managing Director of the 4dentists Group of companies

Richard Lishman, awardwinning Founder of The IFA’s – a specialist firm of Independent Financial Advisers that provides guidance and advice for some of the wealthiest individuals in the UK and around the globe, heads this series of editorials for lab technicians.

In the last editorial of the series, our character, Bridget Crown, took the plunge and bought her first home. Now, time has moved on, she’s met and married the man she wants to spend the rest of her life with, and she’s also added to her family, giving birth to a baby girl.

But how have these changes impacted her financial situation and what are some good things for Bridget to consider now that her family has grown?

Pooled resources

As Dame Helen Mirren once said, “it can’t be a great marriage without being a partnership.” From a financial point of view, a marriage can bring a certain number of benefits, especially as couples can pool their resources, split bills and tend to have more capital to fall back on.

However, with these benefits should also come some extra considerations. Raising a child is not a cheap business, and modern day estimates of how much it costs to support a child financially from birth up to the age of 18 suggest that this figure could be at least £160,000 – potentially even more if we include the rising costs of food prices, petrol and other expenses that are likely to continue to balloon over the next few years. i

As such, in order to feel secure in her financial future, Bridget should explore ways to protect her income as much as possible:

Critical Illness Insurance

Should the worst happen and either Bridget or her husband become seriously ill, Critical Illness Insurance is a fantastic way to provide a safety net for the family in the future. Typically, these policies pay out a single taxfree lump sum in the event someone being diagnosed with a serious illness or condition. The conditions covered by these policies will vary, but typically life-changing illnesses such as cancer, Parkinson’s disease and stroke will be included in the policy.

Of course, to get the most security out of this option, Bridget should choose a policy that covers as many ailments as possible, though that will of course impact the price of what she will pay. In general, individuals thinking about Critical Illness insurance should choose a policy that would result in a sum that would cover their mortgage, any outstanding debts (student loans) and living expenses. This way, if it does come to the point where the policy is used, Bridget and her family will have the financial support they need.

There are also joint policies available for couples, but Bridget should remember that in this scenario, if she or her partner claims, the other will be left without cover as the policy will have fulfilled its purpose. Plus, it’s always worth remembering that policies are highly dependent on any pre-existing medical conditions, and some will deny applicants if they have certain health concerns.

Life Insurance matters too

In a similar vein, Bridget and her husband should definitely start talking about Life Insurance and what this could mean for them in the future. Like Critical Illness Cover, Life Assurance policies can often be a good safety net, especially as any lump sum pay-out or series of payments is likely to be enough to cover things such as the mortgage they owe on property or to provide income for the family members left behind.

Some Life Assurance policies can be combined with Critical Illness Cover, giving more comprehensive protection that covers more circumstances. As ever with insurance policies, there are multiple different types of life assurance on the market, so it’s vital that she gains financial advice from a trusted team of financial advisers in order to find a policy that best reflects her individual needs.

When there’s a will, there’s a way

If Bridget has been particularly organised, she may have already drawn up a last will and testament. Having her family will likely have changed her priorities of where she wants any money to be left, meaning that she should probably repeat this process – or go through it if she hasn’t already. This way, she can rest assured that her money is going where she wants it to in the event of her death should she have any particular requests.

Ultimately, while marrying and starting a family is an exciting adventure, it’s also a significant financial change in your life and brings with it a number of new aspects to think about. Seeking expert financial advice/ guidance is the most beneficial way to navigate this next stage, especially as experts will be able to identify the policies that will best protect you and your family moving forward.

For more information, please call 0845 345 5060 or 0754 336 8478 or visit

www.theifas.com

REFERENCE

i Child Poverty Action Group. Cost of a Child. Link: https://cpag.org.uk/policy-and-campaigns/ cost-child#:~:text=The%20Cost%20of%20a%20 Child%20in%202019&text=The%20latest%20 report%20in%20our,up%205.5%25%20since%20 2012). [Last accessed May 22].