How To Protect Your Finances From A Natural Disaster

The current LA wildfires are projected to be the costliest natural disaster in U.S. history. Most people think of property damage when discussing the costliness of natural disasters. But there are many other financial implications for people impacted by disaster including increased credit card debt, increased mortgage delinquencies, and general difficulty accessing financial aid. All of these challenges point to the importance of organizing our financial situation.  

If you’ve worked with me, we’ve discussed the importance of making financial decisions today that “future you” will be proud of.

Proactively taking the below steps will make your life less stressful – and less costly – in the event you’re impacted by a natural disaster.

One caveat before jumping in… Please read and implement these steps from a place of educated intention, not from fear.

Channel your energy into the idea that you’re taking practical measures to remain in control of your finances in the event of an emergency. 

Financial Emergency Preparedness

1. Assemble an Emergency Financial First Aid Kit. Key items to photograph and/or make copies of:
   
   

   Financial documents: Bank account information, credit cards, loan documents for vehicles and housing, pay stubs, tax returns

   Legal documents: Wills, trusts, powers of attorney

   Insurance documents: Policies and associated cards

   Store copies/photos off-premises (e.g., safe deposit box) or in a waterproof/fireproof safe. 

2. Keep extra cash on hand in your ‘go bag‘ to purchase essentials if electronic payment systems are down.
   
   
3. Document your possessions with photos/videos for insurance claims; refresh annually. 
   
   
4. Review your homeowners/renter’s insurance policies to understand coverage and exclusions. Do this alongside your insurance agent so they can answer questions about technical jargon. 
   
   
5. Assemble a plan for how you will pay your bills and/or cancel services post-disaster. These charges will not stop automatically. Think utilities, streaming services, school loans (inquire about deferment), etc.
   
   
6. Create an emergency savings account to be used in the event of a natural disaster. Begin by saving $5-$10 each week. 

Implementing just one of these tips will have you thanking your future self someday. 

I’m here to chat if you’re unsure about whether you’re sufficiently covered by insurance or whether you’re saving enough.