New Year Resolutions

Most of us make New Year resolutions, most do not complete them. Here are a few that I would recommend that you actually do! Take the time over the holiday period to seriously think about them.

1. Have you updated the insurable value of your home? It has been estimated that up to 70% of New Zealand home owners have not! The way that insurance companies will calculate the amount of money they will pay out in the event of damage to your home has changed. It is now your sole responsibility to specify the insurable value of your home. At present the majority of New Zealanders are under insured. There are some tools available that will assist you to calculate the insurable value, I can point you in the right direction.

2. Do you have a Will, has it been updated recently? Do your beneficiaries know where it is? Dying without a will or one that is not up to date will complicate the transfer of your assets upon your death to your loved ones. I can tell you from personal experience that not being able to locate the Will adds a lot of additional stress at a time already highly charged with emotion. A simple Will is not expensive to prepare - a quick phone call to your lawyer may save you a lot of grief.

3. If you lose your ability to earn an income through death, disability or accident, what is your Plan B.? How will you pay the mortgage or feed the kids? Most people will insure their house but not their biggest asset – their income. For every house lost from fire, three are lost due to death of the owner, but 38 are lost through disability and the inability to make the mortgage payments.

4. What is the structure of your current mortgage? Is your mortgage currently floating or nearing the end of its fixed period? There are some very good rates in the market at present, but I believe we are getting very near the bottom of the cycle. Even if your fixed period has some time to go it may be worth breaking and refixing at lower rates.

5. Are your children nearing the age that they will want to try to buy their first home? There are a number of ways “The Bank of Mum and Dad” can help with this.

6. You are now another year older and another year closer to retirement. Have you started to financially prepare for this? With an ageing population it may not be wise to solely rely on the Government to provide for you retirement income. As a benchmark, it is generally thought that most people in retirement need about 70% of the income they required before retirement. Your retirement saving plan needs to start today!