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Family and money - a set of guidelines for Defence personnel

You need a financial “go bag” of sorts. But this is for your family, so they are well-informed about the whereabouts of your money and financial documents. This can go a long way to ensure your and your family’s peace of mind.

There is a saying that says proper planning prevents poor performance. It’s slightly more colourful in the US Army. But the essence is true.

Your job is a duty that comes with a level of uncertainty rarely found in any other job. The levels of risk are higher for you, and with COVID the risks are now higher for everyone. When your job demands you take such risks on a day-to-day basis you also need to prepare for any eventuality. This means taking financial precautions as well and having a “go bag” as the spies and survivalists like to say. 

A “go bag” is basically one that has emergency requirements and in the case of spies specifically, includes fake identification, passports, cash, etc. and is used when a spy is “burned” or discovered and needs to make a hasty exit from the country that is now actively hunting him.

For others, it just contains everything you would need in an emergency and is ready-to-go without having to do anything last minute. Having a back-up plan is important in any job that comes with risk, to life and limb, attached.

You too need a financial “go bag” of sorts. But this is for your family, so they are well-informed about the whereabouts of your money and financial documents. This can go a long way to ensure your and your family’s peace of mind.

What are the things your family needs to know?

Here's a list you can get started with. You may have more depending on your specific situations.

1. Bank accounts and bank deposits

Ideally, you should only have one bank account per family member. Maintain a list of all bank account numbers, balances (you can update them once in 6 months) and nomination details. Ensure to add a nominee for each one of your bank accounts and deposits.

Preferably, keep your NetBanking credentials (passwords and customer IDs) in a password protected Excel sheet, accessible to your family members only. At least one other person in the family apart from you should know the credentials required for your financial accounts.

2. Investment accounts

Make a list of all your investment accounts, and brokerage, Demat accounts along with nomination details. Also make sure to add the contact information of the relationship manager if relevant.

3. Life insurance policy

Make a list of your life insurance policies, amount, type of policy, beneficiary, nominee, riders, date of premium payment and date of maturity. Remember that this is on top of your AGIF.

4. Details of physical assets

Details of homeownership, bank lockers, large refundable deposits with institutions other than banks, as well as your provident funds' details. Keep the relevant papers in a safe place and ensure you have copies in another location to bring in a level of redundancy.

5. Loans

If you have loans, the details of loans (car/ home, etc.), such as EMI amount to be paid, time remaining to repay the loan, etc.

6. Credit cards and debit cards

A list of all credit and debit cards, with their respective numbers (on the card), as well as the process for blocking whether through an app or through the web or customer care number. If a fraudulent event is reported, your family members can block the cards immediately.

7. Legal Will

Make sure you create a clear-cut will and keep it in a safe place and let your family know where it is. 

Additional Tip: Maintain joint bank accounts, so that in case of an emergency, family members can access the major bank accounts, without having to wait for the approval of the member stuck in the emergency situation.

8. Overall family financial status

Often when a single family member is responsible for managing the majority of financial decisions in the household, the other members can be less than ideally informed about the actual financial status of the family. To make this right ensure that you have a simple status report of sorts that lists out:

All your sources of earnings such as rent, pension, dividends, etc

All your current outflows such as loan EMIs

All your financial investments

The idea is that this should give the family a quick understanding of their net worth and what they have to fall back upon.

How do you go about doing this?

Simply storing your lists and papers in a single place known to your family can work. Some maintain a google sheet and share it with their family. They don't need to look at it every day but they know where it is.

Ensure that you add contact details wherever possible. A periodic update of balances in your list would also help.

Here’s a sample checklist to make sure you remember all of this (design your own):

 

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