Retirement Commissioner Diana Crossan said some people could be looking for higher-yielding investments as bank deposit rates tumble towards 3%, but unless they were prepared to take the risk, she urged a more conservative approach, saying that returns would balance out over time.
Lower interest rates meant returns for some people had dropped 10% to 30% compared with a year ago, but as the collapse of finance companies showed, the higher the interest rate on offer, the greater the risk, she said.
Ms Crossan, who was in Dunedin on Friday, said the current economic uncertainty made it more important than ever for families to know the state of their finances: how much money was coming into the household, how much was owed, how much was being spent and what costs were essential and what were discretionary.
Record numbers of people were using the office's financial website, sorted.org.nz, which she said was a sign New Zealanders were concerned about the recession and were tidying up their finances.
In January alone, the site had 163,000 visitors, a third more than January last year.
Employers are also being recruited to help people manage their finances through the recession.
The office is distributing packs to employers with information about how their staff can address their personal finances.
There were benefits to employers from helping employees.
"We have found people who are distracted by financial matters are not focused on work."
Later this year, Ms Crossan is taking her financial stability message to schoolchildren from years one to 10.
A relevant curriculum has been developed by the Retirement Commission's office which will be embedded in subjects such as mathematics and social studies.
By year 10, she hoped pupils would understand how money was earned, how financial institutions operated, credit ratings, compound interest, and floating, fixed and revolving mortgages.
They also needed to understand the repercussions of their actions, such as defaulting on a hire purchase payment.
