When disasters hit, such as the recent tornados that hit the Mid West, there’s often no time to think about whether you’re prepared financially for the situation. This makes it imperative that you consider ahead of time what you will do in those circumstances, how you will react and what steps you should take ahead of time to minimize your risk.
Spend Money to Save Money
When people look into how generators work and whether they should buy one for their home, money might come into the picture. While the initial investment required to install a standby generator might be significant, there’s something else you should keep in mind: Having a standby generator in your home might actually end up saving you money in the long run.
Why? Well, for starters, if you have a generator, you might not need to leave your home and head to a shelter in the case of a disaster. Looting can be a problem when homes are left empty, so if you’re staying behind, you’ll be able to protect your assets. In addition, being able to run a generator means you won’t go days without power in the case of a major storm, so things in the fridge won’t go bad. Plus, you will still be able to follow the weather reports through the TV or radio.
When it comes to being ready for a disaster, however, getting your important paperwork in order it’s just as important as getting your home ready and stockpiling on food and water.
How to Get Started
The first thing you should do to financially prepare you for an emergency is to select the important paperwork you want to protect. Here’s a breakdown of the most essential documents:
- All personal documents, including Social Security card, birth and marriage certificates, diplomas and passports. If you have additional paperwork, such as military documents, those should be saved as well. If you have a will or estate planning paperwork, add that too.
- All home-related documents, including car title, home deed and insurance policies
- Financial documents: account information for your 401(k) or IRA, as well as any bonds or stock certificates you might own
- Medical documents: Health insurance cards are a must during an emergency. So are prescription records, in case you need to refill essential medication for a condition
You should also have written record of all your most important phone contacts, including your doctor, a friend or relative you can call during an emergency, a vet clinic if you have pets and your insurance (both medical and car insurances). Don’t rely on the numbers saved in your phone during an emergency — you might not be able to recharge your phone or the lines/towers might be inaccessible, and then you won’t know the numbers to call.
How to Store the Paperwork
Important documents should always be stored in a fireproof, waterproof box. Unless you have tons of paperwork, you can go with the smallest of boxes, which should be big enough to store several full folders.
Waterproof plastic containers are a good second option if you have nothing else available, but keep in mind these will only serve as protection against water, but not fire. Also, always test the container in advance by submerging it under water and confirming that water cannot get inside once the lid is secure.
The Power of Electricity
When it comes to financial planning, keep one thing in mind: ATM machines need electricity to run. Once you understand how generators work, you’ll see that only major places, such as hospitals and some stores will have one in place. Chances are your local bank will not. Small grocery shops aren’t likely to have one either. While they might remain open to sell products, they won’t be able to accept credit cards if there’s no electricity.
The answer? Always keep some cash in hand. Better yet, store it along with your financial papers so you can access it quickly during a disaster. You probably don’t need a lot – just enough to buy you a tank of gas and some extra food and water if needed.
Image credit: CNN.com