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.
A little planning now will help you to manage a natural disaster or other emergencies. With all the disasters of recent years, such as cyclones, tsunamis, earthquakes and other natural disasters, many people have to focus on the need to address in an emergency.
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.
Understand what types of losses your renters or homeowners insurance covers. Ask your insurance agent or financial planner about additional coverage for floods, earthquakes, home offices and big-ticket items. Keep copies of your policies in a safe place along with your other important papers.
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 list of important emergency contacts, including direct family members, doctors, medical facilities, numbers for your bank, insurance agent and company, lawyer and financial planner/advisor. Credit card 1-800 numbers can help you quickly retrieve account information.
The last but by no means the least make sure you have a funded emergency savings account. This account should be separate from any other account and contain enough money to cover at least three to six months of living expenses. This type of account will lift a heavy burden from your shoulders should an emergency occur.