Nicky

Is 29 years old and works in the IT department of a tertiary institution. She was sick of living with flatmates and so she bought an apartment a few years ago. Nicky worries about what would happen if she loses her job or becomes ill.

Her two bedroom apartment has a mortgage of $180,000, but on current valuation it is only worth $170,000. She also has credit card debts of $2,000.

Nicky decided to get some advice, so she called the Family Budget Service Budgetline on 0508 283 438.

Nicky's Plan

1. Financial Snapshot
Get a clear picture of your finances by filling out a My Finances Form.

2. Reduce expenditure
Review bank statements to see where non essential spending can be cut; research ways to save on food, power, entertainment.

3. Make a budget
Budget how much money you expect to receive and how you will spend it. Start with essential payments then work out how much you have left for discretionary items.

4. New sources of income
Consider getting a flatmate or hosting an overseas student.

5. Plan for the worst
Review what insurance policies are available – income protection and disability insurance may be appropriate.

How Nicky implemented her plan

Nicky did a budget, and decided she would get a flatmate to help pay the mortgage and a share of the bills.

She set up an automatic payment to her credit card, timing the payment to go out the day after she gets paid.

Once her debt is paid off, she plans to redirect the automatic payment into a savings account to build a cushion for the future.

Nicky also took out home and lifestyle insurance to protect herself in the event of illness, injury or redundancy.

Now that my insurance is organised, I feel so relieved; it really is worth it.