Selasa, 04 September 2012

How to Protect Your Finances Before Disaster Strikes





Are you prepared for disaster? After listening to the news about all the natural disasters over the past few months, I can't help but think of the turmoil the survivors must be experiencing. I'm sure their lives must be confusing and traumatic given the physical and financial loss. So, I started thinking about the things that no one wants to think about and how to protect your finances before disaster strikes. Whether the disaster is a natural catastrophe that affects an entire geographic area or a fire that destroys a single house, the consequences for the survivors are real and go far deeper than the visual destruction.

It's important to have a plan that protects you and your family should a tragedy strike and you find yourself unable to live in your home or go to work for a period of time. If you only had a few moments to evacuate your home and could not return for days or maybe even weeks, what would you take and how would you access cash, banking information, identification or important information? Here are just a few tips to help you prepare for a disaster before it's too late.

· Think about what could happen - I don't mean to dwell on it or be afraid. But look around you. Determine the most likely hazards and plan accordingly. For example, do you live in a community that is prone to tornadoes, hurricanes or wild fires? Preparation for each kind of disaster might vary but there are some things everyone should do. Talk to your local office of emergency management as they have tips and recommendations about preparing for a disaster.

· Review your homeowner's or renter's and car insurance coverage periodically. What does your policy really cover? Most homeowner policies do not cover damages caused by flood or earthquake damage. If you live in an area prone to these disasters, you may want to consider purchasing a separate policy for that coverage. The goal is to have enough coverage to repair the damage to your house, cars and other valuable property and to provide temporary lodging for you and your family should the need arise.

· Keep records of your personal property and include the estimated value. Many insurance agents encourage their clients to take video footage of their home on a regular basis and to store it outside of the home in case they need to file a claim.

· Sign up for direct deposit if your company offers it. Having your funds sent directly to your bank will help ensure that you can access those funds quickly should you need them. Direct deposit also avoids the risk of checks being lost, delayed or stolen. Consider setting up computer or smartphone access to your banking accounts so that you can manage your accounts online from anywhere without having to write checks.

· Have an emergency savings fund. The disaster may affect your ability to work or earn income for a period of time so having a savings account can help you through a difficult financial period without having to take a loan or borrow from family. Experts suggest that you should have 3 to 5 months in your savings for emergencies. And remember, your money is safer in your FDIC or NCUA insured institution than if it's hidden under your mattress.

· Make backup copies of important information. For example, scan your license, social security card, credit cards or home inventory and store the copies in a secure location such as an online secure storage service that you can access from anywhere. Get a safe deposit box for original important documents and store a copy of the video of your home furnishings. However, do not store items in your safe deposit box that you might need immediate access to such as passports or original power of attorney documents. Seal important documents (whether at home or in a bank) in airtight and waterproof plastic bags to prevent water damage. Store copies of important documents in a sealed envelope with a trusted family member not living near you.

· Know where all of your important information is located and keep it together in your home. Should you have to evacuate quickly, you will be able to go to one location and grab it quickly. Being organized is essential.

· Take precaution against identity theft. A disaster causes enough trauma without adding identity theft to the situation. Start by protecting your debit and credit cards as well as your IDs. Remember, when a natural disaster comes roaring through your community, it can result in everything in your home being spread for miles around. People in desperate situations as well as criminals look for ways to capitalize on vulnerable people. Protecting your assets, finances and credit can be essential in the rebuilding of your life after a disaster.

For more information on how to adequately prepare for a disaster, the Federal Emergency Management Agency (FEMA) publishes information about disaster preparedness. For more emergency preparedness tips from FEMA for individuals, visit www.ready.gov.

Joanna Murphy is Certified in Bankruptcy and is a Certified Financial Counselor by the Credit Union National Association. Her company, New England Credit Consultants is the ONLY licensed and bonded credit repair agency in the State of Maine. For more information about NECC and to read other articles about Financial Fitness, please visit http://www.necreditconsultants.com.

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