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Hurricanes! Earthquakes! Fires!
Severe weather and other natural disasters have been a big part of the news lately. From tornadoes, droughts, and hurricanes to wildfires and earthquakes, few regions of the country are untouched.
September is National Preparedness Month, and recent events remind us that it’s a good time to review how prepared we are for a disaster. It’s a time to not only prepare for your physical needs such as food, water, and clothing, but also to formulate a financial readiness plan in case of an emergency.
Consider the following tips when formulating a financial disaster plan:
Protect your financial documents
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. In addition, consider a fireproof safe for storing your documents at a second site in your home.
Protect your identity
Notify the three credit bureaus (Equifax, Experian, and TransUnion) that you have been affected by a man-made or natural disaster. By placing a fraud alert on your accounts, creditors must contact you before opening any new accounts or making changes to existing accounts. This will help you avoid becoming a victim of identity theft, as crooks seem to thrive on distressed individuals.
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. Also, 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 for contact
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 includes: 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 ensure that your family is financially prepared to weather any storm.