Know These Basics to be Financially Prepared for Emergencies

6 MIN. READ

With the increase in occurrences of natural disasters, we've realized that being financially prepared for emergencies is necessary. We hope disasters never affect us and our families. At the same time, we want to minimize risks and ensure we stay safe in any situation.

We’ll show you how to prepare financially for a hurricane in Florida or any natural disaster so you can be ready for anything.

Prepare for Emergencies

The CDC has said that about half of all U.S. adults are unprepared for emergencies. Plan for disasters beforehand if you want to be in the other half. This way, you can stay organized and stay calm when problems arise. For example, keeping all your essential information together is handy if you apply for disaster assistance. Be sure to keep both paper and digital copies of all your data.

To be financially prepared for an emergency, you may need personal, medical, and financial information:
 

• Personal. Some examples of personal information are a photo ID, birth certificate, marriage license, passport, and Social Security card. Keep these documents secure. You can store them in a fireproof cabinet where you can find them quickly during any emergency.
• Medical. Gather medical health insurance cards, life insurance policies, current medications or prescriptions, immunization records, and other important information you may need to present for medical care.
• Financial. Some noteworthy examples of financial information are bank account numbers, bills and utilities, tax returns, life insurance policies, homeowner's and flood insurance policies and warranties, your mortgage or lease agreement, and anything else you might need to have easy access to in an emergency. By keeping all your financial records in one place, you can make it easier when it comes time to maintain payments.

You'll also benefit from documenting and photographing all your valuables and assets. Doing so will make it easier and faster to account for assets if you ever have to file an insurance claim on your property.

For more information, see FEMA’s Emergency Financial First Aid Kit (EFFAK) checklists and forms. You can use them to get started with collecting your data. You can also visit the CDC website to learn more about the types of resources and plans you should have in case of an emergency.

Review Insurance Coverage

As an insurance policyholder, you work hard to care for your home. The risk of Florida's natural disasters could lead to unexpected losses and financial burdens. Reviewing your insurance policy to ensure you have adequate protection is essential.

A great time to review your coverage is before your policy is up for renewal. Insurance companies will send a renewal statement that details changes in your insurance premium or coverage limits.

This notice is sent about 30 to 60 days before your policy expires. Specific policies like homeowner’s insurance will automatically renew upon your premium payment. Carefully review your renewal statement and keep notes on any questions you have.

Make an appointment with your insurance agent to review the policy and ensure it meets your needs. If changes are needed, your agent can help find a policy with optimal coverage. Additionally, it might be a good time to consider other types of insurance, such as Life Insurance, to protect your family.

Create an Emergency Budget

Remember, you are still responsible for paying your bills in an emergency or disaster. An emergency budget takes your expenses down to the bare necessities. The goal is to help stretch your dollars to last longer by focusing on your basic needs and financial responsibilities.

To create an emergency budget, follow these steps:
 

• Review your current budget. Look at your spending over the last 3-6 months to understand how much you’re spending. Write out specific categories like gas, groceries, clothing, and entertainment.
• Distinguish expenses. After listing all your expenses, place them into two categories: Necessary and unnecessary. The “necessary” fees include groceries (do not include dining out), mortgage payments and average utilities cost.
• Determine which expenses to keep. This activity could motivate you to take action now, like canceling streaming services. You eliminate or lower your emergency budget's “unnecessary” expenses in this step. If a disaster occurs, for example, you can act quickly to eliminate those expenditures.

An emergency budget is one part of being financially ready to handle an unexpected event. The other half is building emergency savings. Setting up an emergency savings account now gives you time to build up funds you can use for an emergency. You will need at least six months of your expenses saved. Set aside a separate account to keep your emergency savings.

Consider setting up electronic and automatic deposits and payments, so you won't have to go to a branch or make payments.

Preparing for Hurricanes

Florida natural disasters include the threat of hurricanes, which takes specific preparation. Ensure you understand the difference between a hurricane “watch” and a “warning.” The National Weather Service posts these alerts on TV, radio, and online. You should also have an evacuation plan and a supply kit after a hurricane. Here is more on how to prepare for a storm in Florida.

Build an Evacuation Plan

Suppose you must evacuate your home during a hurricane. Identify the closest shelters and routes. In that case, you can take it to get there. Pet owners should contact local emergency management offices to get a list of pet-friendly accommodations. If you have time, unplug your appliances and turn off water, gas, and electricity. You’ll need a supply kit to grab in case of an evacuation.

Post-Hurricane Supply kit

Your emergency supply kit should include everything essential after a hurricane. The minimum items your kit should include are:
 

• Water - one gallon per person/day (3-day supply)
• Non-perishable food that’s easy to prepare (3-day supply)
• Flashlight
• Radio (battery-powered or hand-crank)
• Batteries
• First aid kit
• Personal hygiene and sanitation items
• Medications (7-day supply)
• Map
• Cash
• Blanket
• Cell phone and chargers
• Copies of personal documents like passports and insurance policies.

This list is a good starting point for your post-hurricane supply kit. Consider the needs of all your family members and other supplies to keep handy in your home if you can take them with you.

Recover From an Emergency

It might take a long time to recover from an emergency. But if you stay financially prepared and have easy access to your personal, medical, and financial data, it will help. You'll have more time to deal with other issues, like your job, insurance claims, and disaster relief programs.

Whom to Contact After an Emergency

Here are some other steps to speed up the recovery process:
 

• Talk to your employer. In an emergency, you’ll likely miss work. If this happens, talk to your employer about your situation so you can stay on top of your income and expenses. If you expect to be gone for a while, ask how to arrange an alternate or remote work schedule.
• Talk to your insurance company. This is when you bring out your list of valuables and assets. Before throwing away anything, take photos of the property you are claiming. While your insurance company will be busy with claims, continue communicating with them to resolve your claim easier.
• Seek assistance and relief. You’ll likely need to provide personal, medical, and financial information to apply for assistance or relief. Contact local, state, and federal agencies for disaster relief funds. For example, you can visit usa.gov to learn about disaster relief assistance and the COVID-19 pandemic.
• Talk to your billers. Call your mortgage provider, utility company, or credit card issuer. Many will work with you to accommodate your situation during an emergency.

Emergencies can stress you out, but you can recover faster by staying involved with your community and up to date with information. Often, you can learn more from other people in your area who have been affected by the same emergency.

Be Prepared With Power Financial Credit Union

Power Financial Credit Union members have access to financial education and resources that help them know how to prepare for a hurricane in Florida or stay financially prepared for any emergency.

We offer a shared branch network, 24/7 mobile, online banking access, and more. This means you can count on Power Financial Credit Union to help you be financially prepared no matter what. Contact us today to see how we can help you and your family.