We have all seen many stories in the news lately about families fleeing wildfires, hurricanes, and other natural disasters. They were followed by stories of survivors picking through the wreckage. One lesson for all of us: we need to be prepared.
Here are some ways to improve our financial readiness, in case an emergency strikes.
- Give yourself a financial cushion. While your credit cards can help in a pinch, it's best to have an amount equal at least two or three months of necessary living expenses saved. Examine your monthly cash flow and stockpile cash in a savings account that you won't use, unless necessary.
- Have a little cash on hand. If it’s a real emergency, you may not be able to access your cash easily, and ATM or credit cards may not work. Keep $100 or so in small bills and even some coins handy.
- Be sure you have the right coverage. Insurance is one item you pay for, hoping you never need to use. However, if you're paying for it, be certain it's going to help. Be sure the coverage you have keeps up with the cost of replacement.
- Use your camera. If you need to make an insurance claim, you’ll be asked to document everything you've lost. A good way to do this is by taking photos or videos of everything in your home and store them in the cloud for easy access.
- Keep your records safe. Retain a copy of all your critical documents. This should include insurance records, medical information, tax returns, financial accounts, estate plan, and personal IDs. Keep them all in a safe place. You can also scan and save everything to a flash drive and store it in a safe deposit box or with a trusted friend or family member outside of your immediate area.
This kind of smart planning will help ensure that you and your family are prepared for any kind of emergency.
Reference: NASDAQ (February 14, 2018) “5 items for your financial “go-bag””