Preparing Your Finances for a Disaster: Creating and Implementing a Plan

Preparing Your Finances for a Disaster: Creating and Implementing a Plan

The human race has been subjected to a wide array of disasters all throughout history. Natural disasters such as hurricanes, tornadoes, floods, wildfires, and earthquakes have resulted in trillions of dollars’ worth of damage. Human-created disasters such as industrial accidents, acts of terrorism, and incidents involving mass levels of violence have devastated both personal and community economies. Mass traumas such as outbreaks of infectious diseases, rioting, and the effects of substance abuse and addictions have hurt an immense amount of people.

Without warning, it is possible to lose your vehicle, your home, and your belongings. While preparedness is often associated with ensuring the proper supply of water, food, and items of necessity – such as blankets for warmth, flashlights for maneuverability in the dark, and tents for shelter- it is also important for populations to take the time to ensure a high level of financial preparedness.

In this brief guide, you will learn how to create and implement a plan to ensure that your finances are prepared for a disaster.

Gather, Copy, and Organize Documents

The first step to a solid financial plan is to gather, copy, and organize all important belongings. These should include banking documents, insurance documents, personal identification documents, copies of your credit and debit cards, verification of insurance coverage, a detailed inventory of personal property, property tax bills, and records of ownership for anything and everything that you have.

You should have a paper copy, copies saved digitally on a flash drive or an external hard drive, as well as copies saved on a cloud device. This will ensure – regardless of whether one or more of your copies are destroyed or stolen – that you always have some type of copy that may assist you during a disaster.

One of the best methods for storing copies of important documents is to obtain and utilize a safe deposit box at your bank.

Create and Build an Emergency Fund

The next step to ensuring your financial security during an emergency is to make certain that you create and build an emergency fund.

You should make certain that you open an account at an insured banking institution that offers a high rate of interest. It is best to ensure that you have – at a minimum – at least enough money to cover three months’ worth of expenses; however, it is best to have enough to cover six months to one year’s worth of financial obligations.

This way, should the unexpected occur, you will be able to have enough – financially -to make it through the situation.

Insurance is a Must

The third method for preparing your finances is to make sure that you have insurance on all of your belongings – especially your health, your vehicles, and your home. In the event of an emergency, most of the policies associated with these items will offer you some degree of financial support, backing, and replacement.

Yes, you are required to pay the monthly rates associated with the coverage, but, the peace of mind that you will experience with insurance is well worth the price.

If you would like more information on how to financially prepare for an emergency, contact Somerville National Bank today!

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