What to do about money during a disaster

It is the responsibility of every American to be prepared for a possible attack or a natural disaster. The recent Tsunami and 9-11 have made us acutely aware of the possibilities. The biggest concern of such disasters is the loss of life. After securing immediate needs for the basics, like shelter and food for survivors, there is the economic recovery of the area. You and your family should have emergency kits along with plans for a place to meet in the event of an emergency. You also need to think of what financial loss you may incur from a disaster. One possibility is a loss of a job or employer. What would you do if it happened to you? Here are some steps to take before you are faced with a financial disaster.

  • Have copies of your insurance coverage in your safe-deposit box at your bank. Also copies in your home fire safe box, which is located in a secure place at your home. You should be able to purchase a home fire safe box for under $100.
  • Make sure you understand your insurance policies completely.
  • Take an inventory of your household about every two years. Use a video camera or photographs, and again, keep copies in your safe boxes.
  • Have a copy of all your bank accounts and credit cards in your safe-deposit box and in your home fire safe box.
  • Know what all your credit card limits are and use them sparingly.
  • If you cannot meet your payments, call your creditors and explain your hardship.
  • Take charge and realize that you have to change your spending from how you used to spend, to how you need to spend now. For example, you may have to live without a cell phone or cable TV.
  • Set your priorities. Pay your bills before you spend any extra money on unnecessary items.
    For example:

    • Food & Utilities
    Rent or Mortgage
    Taxes & Insurance
    Creditors

  • Keep most of your money in a financial institution. If you need to leave your residence, perhaps during an evacuation, you may still be able to access your money via debit or ATM card transactions.
  • Have some cash, travelers checks, debit and credit cards on hand.

Remember any money not in an interest yielding account will not grow.

  • Keep your communication open with loved ones and listen carefully to everyone’s input on the financial situation. This is a highly stressful time and you don’t want to complicate matters with relationship problems.

We never know when disaster may strike. Be prepared with the essentials to make the discomfort a bit more tolerable. Think of ways in which you can ready yourself and protect your family from any unforeseen disaster or monetary loss. FEMA has a web site on "How to prepare" also at www.fema.gov/p+e/prep.htm

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