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Financially Preparing for Disaster

Financially Preparing for Disaster

November 21, 2017
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With numerous wildfires on the west coast and two hurricanes drilling the south over the last month, it’s fair to say nature is unforgiving. It is also unpredictable. Yes, hurricanes generally happen around the same time every year, but we never know when they will strike and how crippling the damages will be.

Given this uncertainty, you always need to be prepared, financially and otherwise, for a disaster. Here are some tips to help you prepare your finances for such an event.

Have proper insurance coverage

This may be the most important one on the list. You need to make sure you have proper coverage on your home, car, and other belongings so you are able to be made whole again after a disaster. I recommend seeing an insurance agentto find out if you do, in fact, have proper coverage.

Emergency Fund

The second most important item on the list is to have an emergency fund. This is designed to pay for unplanned expenses, for example, a car repair. It is also vitally important during disasters and disaster recovery. If your house is damaged and you need a hotel for a week, you need money to pay for it, and relying on a credit card to cover you is a bad choice.

Have cash on hand

In the event of a serious disaster, where thousands or millions are affected in the aftermath, people are going to make significant withdrawals from their bank accounts. Banks could have been damaged during the disaster or they could run out of money (banks only have so much cash on hand). In either case, you will need money to purchase items you need.

Keep proper records

You must make sure all of your important documents – birth certificate, social security card, deeds, bank statements, etcetera are properly protected. I recommend storing them digitally in two places. First can be on a home computer and the other should be on a storage device in another location. For the items that you need a hard copy for, i.e. birth certificate and social security card, keep them in a safety deposit box.

Another important part of record keeping is the knowledge of what items you have. If you experience a fire at your home and it burns to the ground with everything inside, the insurance company will want to know what you lost and the value of it. Go through your home with a video recorder, walk into each room and point out various items, describe what the items costs and when you bought it. After you have done this, store the video on your computer and the storage device at another location.


Experiencing a disaster can be traumatic, but dealing with the uncertainty afterword can be as well. Having a plan and being prepared for the worst will give you peace of mind, as well as aid you in the recovery process. Dealing with a disaster is a matter of when, not a matter of if, so do you what you can now to plan for the disaster that lies ahead.

Note: The materials provided in this article are opinions from the author and should not be taken as personal financial advice. Please do your due diligence and consult with a financial professional before making any financial decision.