July 16, 2020

Prepare Your Finances for a Natural Disaster

When an emergency or natural disaster strikes, it is important to be prepared. This involves more than thinking about emergency savings, it's also about having access to important personal financial, medical and household records that can help you start your recovery process.

How can you best prepare for the unexpected? The Ready.gov website offers resources, tips and guidance for preparing for the impact of an emergency and lays out four simple steps for financial preparedness:

  1. Compile: Assemble your important financial documents and contacts.
    • Use the checklists, such as the Emergency Financial First Aid Kit, to organize the documentation that you should collect. These will primarily fall into four categories: household identification, financial and legal documentation, medical information and household contacts.
  1. Review: Review your insurance policies and financial paperwork to be sure that they are still accurate and current.
    • If you are a homeowner, ensure that your homeowners insurance coverage is enough to support you in an emergency. 
    • If you are a renter, verify that your renter’s insurance is up-to-date.
  1. Safeguard: Store paper and electronic copies of all files in safe locations.
    • For paper copies of important documents, store them in a fireproof and waterproof box or safe.
    • For electronic copies of important documents, store them in a password-protected format on a removable flash or external hard drive in your fireproof and waterproof box or safe.
  1. Update: Revisit and update your checklists and contact forms regularly.
    • Updates are especially important when significant changes in your life occur such as marriage, death or birth of a child.

What else can you do to prepare?

  • If you are able, start saving today. Consider creating an emergency savings account and keeping a small amount of cash on hand in a safe place to help you rebuild after a crisis.
  • If you depend on regular benefits, such as Social Security, consider switching to electronic benefits to protect yourself in case mail service is disrupted during a disaster.
  • Learn about the types of natural disasters that may occur where you live, work or travel to most often.
  • Stay up-to-date with the emergency plans in your community, children's schools and place of work.
  • Make a communications plan for your household and be sure to share updated versions with all the members of your family.

Following these tips today will help you and your family be better prepared for the impact of an emergency you may face in the future. For more information on getting help with a natural disaster, visit My Home by Freddie Mac®