Tuesday, September 20, 2011

Are You Ready for a Disaster?

Ever heard the saying, “Stay ready, so you don’t have to get ready?” . . . Well, with the ambush of earthquakes, hurricanes, tsunamis and tornadoes we’ve experienced since the beginning of the year, you should’ve seen enough by now to know how devastating the effects of any disaster – natural or man-made, can be. Since January, FEMA has confirmed over 80 major disaster declarations in the United States alone. Regardless of whether you live in a typical disaster zone or not, the reality is you are now fair game for experiencing one. So, the question is whether you’ll take steps now to safe guard your family in case of emergency or wait until disaster actually strikes. President Obama declared September as National Preparedness Month, appropriately so as the 10th anniversary of 9/11 remains fresh in our mind.  In his proclamation, the President encouraged “all Americans to recognize the importance of preparedness and observe this month by working together to enhance our national security, resilience, and readiness.”

When preparing for a natural disaster, the necessities that usually come to mind are food, water and shelter. While physical safety is definitely a primary concern, few tend to think of finances as the next major priority. So, in addition to checking out sites like www.ready.gov for physical preparedness, below you’ll find a few tips to get your financial house in order in case of catastrophe.

1.    Get it together. The last thing you want to do in the event of an emergency is scurry through papers in your kitchen’s junk drawer. Create a filing system that allows you to get all of your documents together in one, organized place. 

2.    Take inventory. Maintain an updated inventory of all valuables along with serial numbers, warranty information, photos, and even videos, if possible. Some people walk through their home with a video camera to document everything. Having an inventory is going to save you lots of headaches in the event of a disaster which produces subsequent insurance claims.  Remember, however, to keep the list, photos and videos off-site for obvious reasons.

3.    Stash some cash. In the event of a devastating disaster, you may experience a period in which your region has no power. Credit cards and debit cards will do you no good under such circumstances because ATMs will likely be offline. (NOTE: That doesn’t mean you should leave your cards behind. Vandalism often occurs after disaster and you don’t want to make a bad situation worse.) Keep some cash in your home emergency kit.  Aim to build your emergency disaster reserve up to at least $500 dollars.  It may help to add an additional savings line item onto your budget outside of what you’re already saving until you accomplish this.  

4.    Keep documents off site. If possible, scan copies of your documents onto a password-protected thumb drive and keep it in a safe deposit box or at a family member’s home out of the area.  If scanning is much too fancy for you, store quality copies of important documents in a portable and durable fire/waterproof file box. At the minimum, include color copies of your driver’s license, birth certificates, marriage and family records, adoption papers, property deeds, wills, insurance policies, passports, Social Security cards, immunization records, bank account information, credit card account information, contracts and tax records.  If you do choose to go with a safe deposit box, remember to wrap all documents in a plastic bag to keep out moisture and store an extra key in a location outside of your home.

5.    Maintain proper levels of insurance. Most people are significantly underinsured. Unfortunately, insurance is one of the first areas people tend to cut when striving to trim expenses. Make sure your home is adequately covered, even if you don't necessarily reside in a disaster zone. The National Endowment for Financial Education (NEFE) suggests, at minimum, purchasing full-replacement insurance so the insurance company will pay to replace the residence up to the coverage amounts in your specific policy. Also, have your property appraised periodically to make sure you have the right coverage for your possessions and home and adjust coverage as your experience life changes, like a new baby or acquiring a new property.

6.    Remotely back-up computer files. Computers can be replaced, but the information stored on them cannot. Use an online, remote back-up system to safeguard your computer files. This will save you the headache and cost of lost documents. Companies like SugarSync.com specialize in cloud technology which allows you to access your computer files 24/7 from anywhere.

No one has ever regretted being prepared for the unexpected.  Being prepared can make the difference between whether your family survives a life-or-death situation.  So, to help you get started, check out financial empowerment non-profit, Operation HOPE’s FREE Emergency Financial First Aid Kit or Personal Disaster Preparedness Guide.  Both documents will help you assess how prepared you are and what you need to do to get there.

Until Next Time,

Seek Wisdom, Find Wealth & Be Blessed!

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