Column: A money emergency kit

The Christchurch earthquake  is a poignant reminder that life sometimes takes an unexpected turn for the worse. While it's unsettling to think about losing a job, your home being devastated by a natural disaster or an illness affecting a loved one, life is full of unknowns.
Having your financial affairs in order before a crisis strikes will ease some of the stress. With a little planning, you can minimise the impact of unexpected financial hardships.
It's like preparing a home emergency kit for your money.
1. Create an easy-to-find, easy-to-understand, file of financial information
It will mainly contain financial matters - banking, insurance and investments for example. This information is then readily available, in one place, when you - or those looking after your affairs - need it most.
It's also worth giving a copy to a trusted friend or relative who lives somewhere else in case your home or office is destroyed.

2. Build up an emergency fund
If you haven't already done so, build up an emergency cash fund. If you can't just set aside three to six months' worth of salary now, work on building up a reserve.
The important thing is to get into the habit of saving and, should anything happen, don't feel bad spending it. That's why you have the fund.

3. Protect your assets
Have sufficient insurance to cover your mortgage, income, loss or damage to your car, home and contents and medical costs, if disaster strikes.
If you're a business owner, you will also want to consider insurances such as life and disability, loss of key person, loss of profits and director's liability.
4. Update your will
Regardless of how much money you have or your family status, everyone should have a valid will and review it every three years or so. The goal is to ensure your affairs are arranged in a way that will allow your wishes to be carried out without question or hassle.
You may also want to consider appointing someone to look after your affairs if you are incapacitated - power of attorney - and setting up a discretionary or family trust to further protect your assets.
5. Don't put all your eggs in one basket
New Zealanders have more than 75 per cent of their wealth locked into housing, which creates a problem if your house is badly damaged or destroyed.
It makes good sense to spread your wealth across a range of assets to spread your risk and maintain your liquidity, so you're not reliant on one or a few sources of cash, if you need it.
Adequate diversification of risk will maximise investment return. A typical portfolio should be invested across shares, property, bonds, cash and both domestic and overseas markets.
6. Get good advice
Financial success requires good planning and ongoing attention to your goals. It pays to get advice from a qualified professional you trust.
- Allan Williams is an adviser with Spicers Portfolio Management