“It’s always something…” Roseanne Roseanna Danna (Gilda Radner)
by Katie Benson
Let’s Talk About Annuities.com
It doesn’t take the end of the world to upend your life. From hurricanes, floods, and earthquakes to manufactured economic disasters, the world is plagued by the unknown and rocked by the unexpected.
Financial preparation, then, is less of a choice and more of a necessity. Proper financial planning is the bedrock of resilience when a person is faced with disasters. By taking stock of your income streams, budgeting wisely, and anticipating potential challenges, you can mitigate a significant portion of the damage wrought by catastrophic events. Without such well-thought-out plans, you risk not only retirement and income setbacks but also potential dings on your credit report and, in extreme cases, bankruptcy.
While being prepared for an emergency can seem overwhelming, there are a few things you can do to mitigate the chaos that accompanies it. I’d like to share some of these steps with you right now.
Before disaster strikes: Take a proactive approach
Recent studies paint a concerning picture: a significant percentage of Americans have no plan for emergencies and lack even basic emergency preparedness kits.
It’s no wonder that more people than ever worry about surviving an unanticipated crisis. It’s time to alleviate that worry by mapping out a strategy in advance.
- Set up direct deposits.
When disaster hits, leaving your home may not be an option. Ensure your financial lifeline by setting up direct deposit with your employer or clients. Having your paychecks, disbursements, or pension automatically deposited in your account can help ensure you receive your income, even if you can’t reach the bank or ATM. Automatic deposits also minimize the risk of issues such as bouncing an automated payment, which could negatively impact your credit.
- Build your emergency fund now.
Disasters can wreak havoc on businesses, resulting in reduced hours, forced early retirement, or layoffs. Prepare for an unexpected hit to your income by building an emergency savings fund equivalent to at least six months of income. This financial cushion lets you cover essential costs and survive the upheaval.
- It’s time to evaluate all your insurance coverage.
Insurance is a powerful tool designed to bring you back to where you were before disaster struck. Property insurance, health insurance, life insurance, and annuities act as shields against financial ruin. It’s critical to review all your policies to ensure you have enough coverage for any potential hazards. While cutting corners on insurance products might seem like a surefire money-saving tactic, not having the protection you need could come back to haunt you later, especially if life decides to go sideways.
- Document everything.
It might seem like a daunting task, but organizing your personal and financial information in a safe place can keep you sane and solvent during chaotic times.
Not only should you have digital or written records related to your and your family’s identities, such as passports, driver’s licenses, and birth certificates, but you should also have a record and photos of every possession you own- from furniture to clothing. And you’ll want a list of all accounts, recurring bills, passwords, memberships, and subscriptions.
You should also have copies of medical records, prescriptions, and health insurance cards. Having such information not only streamlines the insurance claims process and ensures you receive proper compensation for your losses but also makes replacing things such as driver’s licenses and birth certificates much more manageable. It’s helpful to take photos with your cellphone and back them up on a micro SD card or cloud server. Make sure that at least one other responsible adult besides you knows where this backup is and how to download it. Any physical copies of critical documents should be placed into a fire-proof, waterproof safe or kept in a safe deposit box. Again, be sure that at least one other person knows where to locate that information and how to access it.
- Do occasional drills with your family.
When life is calm, it is the ideal time for family preparedness meetings. Discussing and practicing what to do during a fire, flood, or earthquake can give you greater peace of mind. When everyone knows the proper steps to take, no matter what kind of emergency they’re experiencing, they’ll be less fearful and anxious. In these meetings, assign roles to every family member, designate a meeting spot in case you’re separated, and share other vital information.
- Anticipate what comes next.
For many people, what happens after a disaster is more challenging than the emergency itself. When the flood waters have receded or the fire’s extinguished, you’ll be left to find to find support for your financial, physical, and emotional recovery.
However, you don’t have to do this alone. By engaging with disaster recovery organizations, government agencies, and counselors, along with your insurance agent and financial advisor, you can facilitate a faster and less stressful recovery.
Conclusion: Resilience is by design, not by chance.
Disaster preparedness is not a one-time task but an ongoing commitment to safeguarding your physical, mental, and financial well-being. Implementing basic protocols before, during, and after a disaster will help you protect your finances and contribute to your overall resilience. A small investment of time and effort spent on preparation today will go a long way toward helping you get through whatever life sends your way.
