How To Prepare Financially for Any Disaster
If you had only minutes to evacuate your home, what would you take with you? If your home was destroyed in a fire or natural disaster, what items would it be most important to have with you? Where would you get emergency cash if ATM and credit card networks were down?
Of course, your first concern would be for the safety of you and your family. But, financial concerns will arise quickly if damage is extensive. Nigel Taylor, CFP, a certified financial planner, offered these suggestions in an interview with Bottom Line/Personal:
- Keep enough cash in the house for a weekend away. Also, keep $300 in one dollar bills on hand. After a natural disaster, stores may not be able to make change. After the last earthquake in California, Taylor said, some people had to hand over $20 bills to pay for a carton of milk or a bottle of water.
- Keep important items in a secure, fire-safe box that can be grabbed and transported easily. In it, keep legal papers, financial records, extra checks, an inventory of household possessions, important phone numbers, a list of your medications, and extra supplies of medications if your doctor will prescribe them. Rotate them monthly so the newest medication is always available. Keep original documents in a safe-deposit box or a fireproof safe.
- As an option to having hard copies of important documents, consider scanning them into a single electronic file and storing the file on a removable flash storage device that you can take with you when disaster strikes. These portable devices are the size of a cigarette lighter and plug into your computer’s USB port. They are available for about $50 in electronics or office supply stores.
- Maintain an emergency fund of three months’ to a year’s worth of basic living expenses in safe, liquid investments, such as short-term share certificates.
- Make sure your homeowner’s insurance includes appropriate disaster coverage and make sure you have “replacement value” coverage on your home and personal items.