Don't lose sight of your new year aspirations

Liz Koh.

Becoming a parent is one of life's most exhilarating experiences and it changes things forever.

Along with the joy comes the responsibility of ensuring a safe and nurturing environment for your children and the challenge of guiding them not only to be successful in life on their terms but to be good human beings.

Parenting is a serious business. There are responsibilities that come with the role of parent.

One of the first lessons for a new parent is learning to put the needs of another person before theirs.

This applies to physical, emotional and financial needs. Children are expensive and part of being a good parent is going without so children can have the necessities of life.

A study done by IRD in 2009 estimated that a middle income family with two children spent around 30 per cent of their household income on their children.

With three children, spending rises to 40 per cent of income. So what happens when that income suddenly disappears?

Tragically, just under 1800 people a year between the ages of 20 and 50 die and an even greater number become seriously ill and unable to work for a period of time.

There are three key ways in which parents can protect families.

• Make a will. Dying without one leads to costly delays in making your financial assets such as personal bank accounts, KiwiSaver and life insurance claims available to your family.
• Buy life insurance, taking into account your overall budget.
• Consider buying income protection or critical illness cover.
Your future income is your biggest financial asset. Make sure you protect it, for the sake of your family.

- Liz Koh is an authorised financial adviser. The advice given here is general and does not constitute specific advice to any person. A disclosure statement can be obtained free of charge by calling 0800 273 847. For free e-books, go to moneymax.co.nz and moneymaxcoach.com.