When the Unexpected Happens: Are Your Finances Ready?

September is National Preparedness Month, a good reminder that being prepared for an emergency involves more than flashlights, batteries, food and water. Your finances should be part of your emergency plan, too.

Severe storms, flooding, fires and power outages can happen with little warning. While we can't always predict an emergency, a few simple steps today can make it easier to manage the unexpected tomorrow.

Start with an emergency fund. Unexpected expenses often come at the worst possible time. Even a modest amount set aside can help cover groceries, temporary lodging, repairs or other immediate needs. If building several months of savings feels overwhelming, start small. Set a realistic goal and consider an automatic transfer into a separate savings account each payday. The important thing is to begin.

Keep important information accessible. Make sure you can quickly locate identification, insurance policies, account information and contact information for your bank and insurance company. Consider keeping copies in a secure, waterproof location and storing electronic copies using a secure, password-protected method. The Federal Emergency Management Agency (FEMA) recommends having important financial and personal documents readily accessible to help make recovery easier after a disaster.

Have more than one way to access your money. If a branch temporarily closes or you can't safely travel, online and mobile banking can help you check balances, transfer funds, deposit checks and manage payments. Direct deposit can also help ensure your paycheck or benefits reach your account even when normal routines are disrupted. The FDIC recommends considering these options as part of financial disaster planning.

It's also reasonable to keep a small amount of cash in a secure location. During a widespread power or communications outage, ATMs and card-processing systems may temporarily be unavailable. You don't need to keep large amounts at home; just consider what your household might need for immediate essentials.

Review your insurance coverage. Know what your homeowners, renters and auto policies cover and whether the limits are enough to repair or replace your property. Some events, including flooding, may require separate coverage. An annual insurance review can help uncover gaps before you need to file a claim.

Finally, be alert for scams. Unfortunately, emergencies can bring out fraudsters who use urgency and fear to pressure people into sending money or sharing personal information. Be cautious of unexpected requests for payments, donations or sensitive account information, and verify who you're dealing with before taking action.

Preparedness isn't about expecting the worst. It's about giving yourself more options when something unexpected happens.

This September, take a few minutes to review your financial emergency plan. Build your savings, organize important documents, make sure you can access your accounts remotely and talk with your family about what you would do during an emergency. A little financial preparedness today can provide greater confidence and peace of mind when you need it most.

Disclaimer
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