Q: I have tried to get my wife, who does not like to think about money matters, to read your column, but so far no luck.

A lot of questions I have had, or would have had, have been raised by others, but I have one now that's doing my head in.

My housing dilemma: I am a recent first-home buyer along with my wife and our 9-month-old daughter. We live in our house with my in-laws, two cats and a dog. As you can imagine for a first home in Auckland, we are a bit squished.

We intentionally bought a large site to develop, but there are a number of ways to do this with different timeframes to have enough savings to refinance the mortgage. We could either:

• Renovate and add to the existing dwelling, which would cost roughly $200,000 and take three years to save. This would limit how we could develop the site in future.

• Build a house in the front yard to live in and keep the existing house, which would roughly cost $500,000 and take us eight years to save for. But it would give us a rental income from the older house of about $500 a week if we rented it out, and also give us options to subdivide and/or tear down the old house and build two new ones in the future.

Building a new house would mean we need to live squished for a lot longer, particularly if another baby is on the horizon. And even after it's constructed it wouldn't be a particularly big house.

Adding to our existing house would mean having a bigger house overall but less potential for adding value in future and no rental income.

I'm seesawing back and forward on this. Please help. I would be stoked to see my letter published. It might even convince my financially oblivious wife to start reading the column!

A: Dear Wife: Welcome! A couple of quick points especially for you:

• Money is not difficult or demanding. You just need to understand a few basics, get things set up in a way


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