The Importance of Being Financially Prepared
A little planning now can help you handle a natural disaster or other emergency. With all the disaster that have hit over the last few years such as, hurricanes, tsunamis, earthquakes and other natural disaster many people have focused on their need to be prepared in case of an emergency.
Very few, however, consider the need to be prepared for a financial emergency in their plans. From keeping an evacuation box with important documents to setting up an account with emergency funds, preparing now can be the difference between financial security and financial crisis.
Create a household inventory for items of significant value and locate originals of important financial and family documents. Store original documents in waterproof bags in a safe deposit box or durable “evacuation box” and photocopies in a safe place. Use a CD to back up key documents on your computer. If practical, store copies with friends or relatives who live outside the area.
Check with your insurance agent and check your policies to make sure you understand what your coverage is on such things as floods, fire, earthquakes etc. Make sure that you have your policies safely stored for future access.
I like to keep at least $500 in cash at home in a good hiding place where I can get to it quickly in case of a sudden emergency. Don’t keep the money in large bills but it should be in small denominations for easier use.
Keep a couple of lists with all your important numbers on them in safe places that you can get to. Include people like your doctor and family members so you can contact them in case of emergencies. Include your insurance company/agent and your credit card numbers in case you need to quickly retrieve account information.
Regardless of where you live and how many natural disasters hit your area, some places are much safer than others, you should have a funded financial emergency fund set up. We should all have at a minimum three months of living expenses set aside in case of emergencies that might occur. 6 to 8 months would be much better especially in the economic times we are currently living in.
In order to ensure that you family is protected both financially and physically make sure that you follow these guidelines. You can also learn more about controlling your financial situation by getting the report Money Management Made Easy.