No matter how tough it gets— Don’t undervalue your insurance

June 18th, 2009 by admin | Filed under Daily News, Money Management.

financial news For the average UK family times are still tough and they best that they can hope for is that they can retain the status quo until better times come around.
Surveys are beginning to show that there is more optimism around, the worst is over and most families are digging in for the long haul.

This means that when the family sits down to discuss their budget (which we all know that they should) then the principal factors that should be taken into account are:

1) How much do we earn?
2) How much do we spend?
3) How much can we afford to spend?

Hopefully all three questions should have roughly the same answer, but if they don’t adjustments have to be made. If cuts have to be made they should be, and families that have attempted to borrow their way out of income shortfalls have learned that in the long term this is a recipe for disaster.

The next stage for many families the next decision is where do we cut? Many families make the wrong decisions at this stage, usually under peer pressure, a modern epidemic of the Western World. Why do with a model 2000 car when the next door neighbor has a 2002, and so on. Why should your little Arthur have a 17″ computer screen, when Damien his best friend has a 22″ with quadraphonic speakers? The list is endless.

And does your next door neighbor or spoiled little Damien know or even care that you are under-insured and even under-pensioned?

The sad facts are that too many families in the UK fail to take their responsibilities seriously as far as insuring their properties, their possessions and even worse, their health or their lives. The theory that “it can’t happen to me” or” let me get through the next six months, and I will see to it” is as dangerous as it is irresponsible. Too many families or individuals don’t get that six months and when calamity strikes they are left totally or at best partially exposed and the ramifications can be much more traumatic than the event itself.

So when it comes down to look at what to cut, do yourself a favour; add insurance and pensions to your list of “untouchables”