Emergencies such as power outages and severe weather can occur at any time and can be costly. Unplanned hotel stays, lost documents, and damaged property are just a few of the costly consequences. But there are ways to be prepared, like setting aside cash, keeping important documents in a safe place, and knowing how to protect your credit if you have to default on a payment. Preparing for the next emergency today could be one of the smartest money moves to make as 2023 begins, and taking small steps each week can make it easier to manage. .
Gabriella Barthlow, a financial coach in the Detroit area, was ready when a multistate power outage hit in 2003. She has enough money on hand to buy food for herself and her two young children, and she puts gas in her car in case she needs to leave the house. was
“I was so happy to have that cash,” she recalls. Now, Barthlow encourages her clients to prepare for the unexpected as well. Power outages, weather disruptions, and other disasters can cause disruption and financial loss, and while most do not come with advance warning, being prepared can minimize the damage. can.
Here are some steps you can take to prepare for the next emergency.
secure physical cash
As Barthlow found, cash can be critical during extended power outages, as machines that accept debit and credit cards may not be operational. Bernie Kerr, author of “The Prepper’s Pocket Guide” and founder of apartmentprepper.com, recommends keeping enough cash on hand to cover gas and food for a few days and carrying at least some of it with you. I want to
“I like to keep $40 in cash in my car or wallet so I can always go home in case the register isn’t working,” says Carr.
The money will be added to your emergency savings fund. This is kept in a savings account to help him through periods of unforeseen hardship or loss of income.Financial experts recommend setting aside 3-6 months of his expenses in that account. often
slowly pile up supplies
Carr suggests long-term purchases of equipment to help survive temporary interruptions in power, water, and other utilities that can occur during natural disasters.
“The next time you go grocery shopping, set aside $10 and get a bottle of water, your favorite canned food, or instant oatmeal,” she suggests. Put together a first aid kit that includes items like antibacterial wipes, or flashlights and extra batteries.
“Many of our disaster prevention goods are camping gear, so there are many sales around summer,” says Carr.
collect important documents
Barthlow suggests collecting important documents (contact numbers). insurance information; recent bank statements; identification; marriage, birth, and divorce certificates — in a waterproof, fireproof box, scanned and stored online in a password-protected account or flash drive; increase.
“We also ask them to organize their lives because when they keep a lot of paperwork, they can’t find what they need,” says Barslow.
This streamlined approach allowed “within an hour I could walk out of my house and know where all my important documents were,” she says.
Paul Golden, spokesperson for the National Fund for Financial Education, a nonprofit that promotes financial education and well-being, says January is an ideal time to take on that challenge. “New Year is a good time to complete the preparatory work. It’s a time when people stock up, organize paperwork, and resolve to be better in all respects.”
protect credit
During emergencies, it can be easy to fall behind on bills and credit card payments, which can damage your reputation, warns Golden.
“If you anticipate any disruption to your timely payments with your creditors, contact each creditor and let them know the situation, and you can ask for an extension,” he suggests.
In the event of widespread disruptions such as the COVID-19 pandemic or power outages, businesses may offer adjusted payment plans for those affected, which you may need to ask for or opt-in to. I can’t.
Also, scammers often target victims of natural disasters, so beware. “Be vigilant in any emails or phone calls sent to you and make sure you know who you’re talking to before sharing account information,” says Golden.
If you get a call from someone claiming to be an insurance company or financial institution, I recommend hanging up and calling customer service to make sure you’re really talking.
start the recovery process
Once the emergency has passed, it’s time to pick up the pieces. File insurance claims, rebuild spent emergency savings, and replace used supplies. Golden suggests taking detailed notes of all customer service interactions to facilitate follow-up and refund tracking. increase. 211.org provides access to community resources such as food banks.
Surviving an emergency can inspire you to prepare for the next. Hurricane His Ike in 2008 made Kerr, who was living in Houston at the time, more focused on preparation.
Carr says everyone should review their emergency supplies at least once a year. “Like having car insurance, it should be part of your everyday life. Emergencies will inevitably happen. Most people aren’t prepared because they don’t think about it. ”
Kimberly Palmer is a personal finance expert at NerdWallet and author of “Smart Mom, Rich Mom.” Email: kpalmer@nerdwallet.com. Twitter: @KimberlyPalmer.
