People can quickly go from prosperity to poverty with the strike of a hurricane, wild fire, flood, or other natural disaster. To better prepare people in the event of an emergency, September has been deemed National Preparedness Month. This is a time to not only prepare for your physical needs such as food, water, and clothing, but also a time to get your financial needs in order in case of an emergency or unexpected event.
Emergencies and disasters can happen any time. The Department of Homeland Security recommends that everyone take steps to better prepare themselves and their families before an emergency occurs. Experience tells us that families and individuals need to be ready with a financial preparedness plan. This National Preparedness Month, consider the following:
Protect your identity. Keep family records, property deeds, birth certificates, wills, insurance policies, passports, social security cards, immunization records, credit card numbers, car titles, bank account numbers, and three years of tax returns in a safe deposit box. Place each document in a plastic bag that can be sealed to keep out moisture.
Start an emergency fund. Regularly contribute to an emergency fund that can cover at least three to four months of living expenses. This fund should be separate from your savings or investment account. In addition, keep extra cash with your emergency kit, which should include a three-day supply of water and food, first-aid kit, can opener, flashlights, radio, and extra batteries.
Make a plan. Your family may not be together when a disaster strikes. It is important to develop a family emergency plan in advance—how you will contact one another; how you will get together; and what you will do in a different location. In addition, make a plan to take care of your pets, family members with a disability, and the elderly. Outline an evacuation route, a meet-up location, and alternative living arrangements while away from your home.
Have adequate insurance coverage. Proper insurance coverage will prove beneficial after an emergency happens. It will cover any property or personal damage. Some important insurance coverage include: auto, home, life, medical, flood, fire, hurricane, and renters (if you live in an apartment or lease a home). In addition, it’s worth considering specialized medical insurance such as short-term and long-term disability in case you are hurt and cannot work for a specified amount of time.
The key message is don’t wait for an emergency to get prepared. Taking a few simple steps now can help a to ensure that your family is financially prepared to weather any storm.