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(Copy and paste the text into your document)Preparing for Financial Emergencies
Don't wait until the last minute!
Natural or man-made disasters, like hurricanes, floods and wildfires, can strike anywhere at anytime. Other types of emergencies that hit us unexpectedly include the loss of a job, long-term disability and lawsuits. Can your finances withstand these emergencies? With this question in mind, it is important to prepare a financial emergency kit for evacuation, as well as an emergency plan for loss of income. Here are several important steps to take to protect your finances from unexpected misfortune:
Build an emergency fund.
Every family should have enough cash to cover a minimum of three to six months of living expenses. This includes rent or mortgage payments, food, utilities, car and credit card payments. If, for example, your living expenses total $2,000 dollars each month, your emergency fund should be $6,000-$12,000 dollars. The money should be kept liquid and in a separate account that is easily accessible and safe. Also, keep a small amount of cash stashed in your home in case of a power outage and your local ATM network goes down for a few days.
Collect important documents.
Having an organized filing system for your records can pay off in a big way when you need to quickly put your hands on important papers. Here are some of the documents you want to have available at a moment's notice:- Identification information for each family member, including pet records. These documents include drivers' licenses, Social Security cards, passports and birth certificates.
- Photocopies of all ATM/debit cards and credit cards, with contact numbers for each financial institution
- Spare book of checks
- Copies of insurance policies and brokerage statements
- Phone numbers of family members, employers, doctors, dentists, police, firefighters and the local emergency response center
- Copies of wills, trusts and other estate planning documents
- Medical records, as well as a current list of medications for your family
- Deeds to properties and automobile titles
- Household inventory of valuables
Store documents properly.
Important papers should be stored in a fireproof safe, lockbox or small backpack at home. Original documents that would be hard to replace can be stored in a safe deposit box. In the home, it is important to store these documents in a secure place because they contain sensitive information that you do not want to fall into the wrong hands, possibly causing you to become a victim of identity theft. Another option to consider is scanning all documents into a computer and then copying the information onto a blank CD-ROM or flash drive.
Review insurance coverage.
Each year, you should take a few moments to review your homeowner's or renter's insurance to make sure it is current. Homeowners can get an estimate of their property value by calling a real estate agent, or possibly by paying for an appraisal. Compare these figures with your insurance policy to make sure you have full replacement coverage on the home. You don't want any surprises if you have to file a property claim for damages.
Financial emergency