How to organize your financial life ahead of natural disasters
If you live in a part of the world prone to wildfires, floods, blizzards, tornadoes, or earthquakes, there are ways you can make sure you’re financially prepared for disaster, beyond insurance.
The Federal Emergency Management Association and the Red Cross advise that households gather important documents and contacts in a safe place, take photographs or record a video of the rooms in your home and any valuable belongings, and to have cash on hand, in case ATMs and electronic or online banking resources aren’t available, among other guidance.
Lisa Berdie, director of policy and research for the Financial Health Network, an organization that focuses on underserved consumers, refers to these steps as “preparedness,” but stresses the need for “investments in efforts to lessen the severity of climate impacts, reduce risks, and minimize financial harm.”
“Key here is recognizing that it is not just the headline-grabbing events, but smaller-scale events and chronic stressors (for example, heat) that have dramatic financial consequences for households,” Berdie said. “Some of the action steps that households can consider (there)... include weatherizing homes and addressing health hazards that are worsened by climate hazards, like mold and air quality.”
Here’s what you can do to be more financially prepared and organized in case of disaster:
First, compile and assess
According to FEMA, the first thing to do is compile important documents. These include: birth and marriage certificates, social security cards, military service records and your pet’s ID tags, microchip and vaccination records.
Other documents to have organized include: housing payments, utility bills, credit/debit card information, receipts from child support, checking, savings, and retirement account numbers, insurance policies, paystubs, tax statements, and wills, according to FEMA.
Medical information to have on hand includes: health insurance and pharmacy cards, records of immunizations and allergies, copies of prescriptions, and records of medical devices or equipment for disabilities.
Also make records of important contacts, such as:
1. Landlord or mortgage representatives
2. Doctors, dentists, or other health care providers
3. Insurance agents
4. Representatives in charge of military benefits and social and disability services
5. Assistive technology or medical equipment providers
6. Lawyers
7. Financial advisors
8. Banking institutions
9. Neighborhood, civic, and house of worship contacts
“Make sure you store important phone numbers somewhere besides just your cell phone,” FEMA advises.
Why is this information necessary?
When you apply for disaster assistance, you may need to show proof of ID or income. You may also need to re-establish financial accounts if checks are destroyed or if online access is down.
Other records can help you prove the identity of household members, maintain or re-establish contact with family and friends, maintain contact with employers, and apply for other forms of assistance.
How else can I organize my financial life to prepare for disaster?
If you don’t have an original version of a document listed above, contact the appropriate company or agency to request a copy. If you receive paper checks for any federal benefits, consider enrolling in automatic benefits, and if you receive paper checks from an employer, consider requesting direct deposit or prepaid debit cards.
FEMA also advises printing or downloading statements of any bills paid automatically, such as rent or mortgage payments, utilities, loan payments, and membership fees. Downloading banking and bill payment apps for your phone can also help you stay mobile in times of emergency.
Photographing or recording a video of the rooms in your home and any valuable belongings is also advisable as a form of record keeping.
Store cash along with important documents
FEMA and the Red Cross advise individuals to keep cash in the same safe location as one’s important documents to pay for emergency purchases in the event that ATMs aren’t functioning or banks are closed. The amount of cash should be based on the basic needs of your family, including gas, food, and medications.
Make sure your information is up-to-date
Review insurance policies and financial paperwork to be sure they’re accurate and current — that includes homeowners, auto, and renters insurance.
Store documents securely
Store paper and electronic copies of all files in safe locations. Consider keeping paper copies in a fireproof and waterproof box or safe, a bank safe deposit box, or with a trusted friend or relative.
If you’re already using a safe deposit box, check state laws to confirm who can and can’t access the safe if the owner dies or can’t access it themselves due to injury or illness, FEMA advises.
To store electronic copies of important documents, use a password-protected format on a flash or external hard drive, which you can also keep in the fireproof, waterproof box.
Finally, update consistently
Revisit and update your documents regularly.
Updates are especially important when significant changes in your life occur, such as: when your insurance changes, when you move, open or close bank accounts, become married or divorced, when you have a child, when your child changes schools, during retirement planning, and if there’s a death in the household.
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