It seems that every week brings dramatic news footage of families coping with hurricanes, mudslides, forest fires and major winter storms. Those stories are usually followed by videos of families picking through the wreckage to salvage what they can. The takeaway: we should all prepare for the worst.
NASDAQ’s recent article, “5 items for your financial “go-bag”” gives us 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.
While we usually have warnings about big weather events, many emergencies arrive with no notice. Prepare now, so that you and your family will be ready. If disaster strikes, you’ll be very glad you did.
Reference: NASDAQ (February 14, 2018) “5 items for your financial “go-bag””