Raewyn Fox: Budgeting for insurance

Getting the right insurance is an important part of managing your money. How important? Raewyn Fox, CEO of NZ Federation of Family Budgeting Services, gives her perspective:

Insurance is one of those things that you sometimes don’t realise the value of until it is too late.

In my 20 years of budget advising experience I have worked with many families who sadly have found themselves in a difficult financial situation which may have been prevented by adequate insurance. Suffering a house fire or burglary or having your car stolen or written off can be devastating enough but without those items being insured, it can cause financial crisis.

When budget advisers work with families it is quite hard to discuss extra insurances which may be needed if the family is already finding it difficult to buy food and pay the power bill. Our approach would normally be to encourage a family to plan ahead and consider which insurances they really feel they need then help them to develop a budget, get on top of their debts, and then work towards a goal of freeing up money so they can achieve their goals of adequate insurance.

What is adequate insurance? I believe this is different for everyone and needs to be a personal decision. I would encourage people to consider the assets they own, their earning power, health needs etc, and then think about what it would mean for their financial situation if they lost any of those things.

It is as important to live comfortably in the future as it is to be comfortable today.

You can get an idea of what insurance might be right for you and how much it might cost with Sorted's new Insurance calculator.

If you need help budgeting for your insurance needs call 0508 BUDGET (0508 283 438) to speak to a trained budget adviser. Their services are free and confidential.