Your home and your partner

You spend your life working hard to provide for your family. But you never know what’s around the corner. Given the responsibility of having dependants, it makes sense to prepare for the unexpected and take steps to protect your family’s standard of living.

Taking your children on the journey from birth to the age of 21 is going to be expensive. In fact, it's estimated that it costs a family an average of £194,000 along the way - including an average of £53,818 spent on childcare and £50,240 on a state education and a typical three-year university degree course (source: Liverpool Victoria 2009).

So, whether it's a new computer, tuition fees for university, a wedding or even a helping hand onto the property ladder, there are going to be some big expenses along the way. However, by thinking about each stage now, you can start planning and saving on a long-term basis.

Credit card protection and loan protection are insurance policies that could cover your repayments if you lose your income due to an accident, sickness, involuntary unemployment, or if you have to go into hospital.

Health Cash Plan

This is a low-cost health plan that pays cash sums towards the day-to-day health expenses we all have to meet. It can cover expenses like going into hospital, seeing a specialist, visiting the dentist or optician, giving birth or for alternative therapies like homeopathy, acupuncture or physiotherapy.

Critical Illness Cover

This is a life insurance policy that can help protect you against the financial consequences of being diagnosed with a specified critical illness. It pays out a cash lump sum that can provide financial support at a difficult time.

National Health Service

The NHS is always there for emergencies and serious illness. But for non-emergency operations, like a hip replacement, where there might be a long waiting list, you might prefer to go private - in which case you could take out a Private Medical Insurance policy that pays for associated medical costs for you and your family.

Pet insurance

This is worth considering when you think that the average cost of a visit to the vet is now over £250 (source: PDSA 2009). It can also cover emergencies, like having to cancel or cut short your holiday because your pet goes missing or needs sudden, unexpected life saving treatment.

Your home may have provided a safe, secure place to live for you and your family for a long time. But, it also represents a significant financial investment, especially if you have climbed the property ladder over the last 20 years or so and are in the fortunate position of having paid off a large chunk of your mortgage. If this applies to you and your home has become a sizable asset, then you might want to consider taking some steps to maximise your home's value:

Shrink to fit

One way to come up with extra cash for retirement and other goals is downsizing - if you think you'd be happy, both financially and physically, in a smaller home. But do make sure you think it through so that the value you release from your current house will be greater than the cost of running a new place.

Rent out a room

Taking in a lodger can be a great way of generating income. If you rent out a furnished room in your home, you can receive up to £4,250 a year tax free under the government's Rent a Room Scheme (correct for 2011-12 tax year). It's sensible to have a binding contract with a lodger.

You should draw up a simple written agreement outlining how much the rent is, when it should be paid, the notice period (one month is normal practice) and any other house rules, such as overnight guests, etc. You should seek legal advice about the contract. Remember, too, to inform your insurance company and mortgage provider. And, it's a good idea to get your lodger to insure his or her own possessions.

Make home improvements

Extensions, conservatories, redecoration and renovation not only make your home nicer to live in, but these changes can increase its value, too. As a rough guide, a new kitchen can add £7,666 and a loft conversion can add as much as £24,981 (source: Halifax, 2009).

Planning for the future takes work, but that doesn't mean life along the way has to be boring. A bit of careful preparation now will ensure your family money is secure in the years to come.

Plan for a rainy day

Sit down and consciously plan your key goals, for the immediate future as well as the years ahead. What financial changes do you need to make to achieve them? Also, try to build up a 'rainy day' pot of money that's easily accessible.

Get serious about planning for retirement

The day when you'll no longer have to work may seem like a distant dream, but it will be here sooner than you think. Start thinking about your retirement needs now and invest accordingly.

Sort out your will

Always make sure you have a clear and up-to-date will. If you don't, you may leave your estate in a muddle, which in turn could lead to complications for your executors.

Plan for funeral expenses

You can also make life easier for your loved ones by paying into a Funeral Trust Plan now, as it will give you peace of mind that your funeral expenses will be covered when you die.

Deal with tax issues

In the event of death, we'd all want to help our families maintain a decent lifestyle and stay in the family home. If you think your estate may be liable to Inheritance tax, you should seek professional advice on how best to provide for the people you will leave behind and how to make your will as tax efficient as possible.

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