Natural disasters rarely give you much time to prepare. That’s why it’s a good idea to put together a financial emergency kit ahead of time. If calamity strikes, having access to needed financial resources can make it easier to focus on what’s most important: your and your family’s physical safety.
Of course, finances are only part of an overall disaster plan. If you don’t have a general disaster plan, a good place to start is the “Make a Plan” page at the Department of Homeland Security’s Ready.gov website. The site has detailed guidance on preparing for a variety of emergencies, and can help you craft a plan to keep your family safe.
Once you’ve got a general disaster plan in place, you can add a financial emergency kit. The form it takes is up to you, but whatever you choose, make sure it’s in a secure and easily accessible place.
Safeguard your kit
Consider storing paper copies of important documents in a fireproof and waterproof box or safe, with a trusted friend or your lawyer, or in a safe deposit box (check with your bank to confirm who else is allowed to access the safe deposit box if you should become unable to do so).
Electronic copies of important documents should be stored in a password-protected format on a removable flash drive or external hard drive in your fireproof or waterproof box or safe, or on a secure “cloud-based” storage server (but note that you may not be able to access them if your computer is damaged, electrical power is down or your mobile phone service is interrupted, so you may want to keep paper back-up copies).
What you’ll need
At minimum, your disaster kit should include these items:
- Personal identification: After a disaster, everyone in your household may require proof of identity to obtain disaster relief services or regain access to your property. You may also need ID to access your financial assets or file an insurance claim. Essential documents include extra originals or copies of driver’s licenses, birth certificates/adoption papers/child custody documents, marriage licenses, Social Security cards, passports/naturalization documents, and current military IDs or military discharge papers. If you have a pet, consider including proof of ownership—such as tag numbers, microchip information, or photos of you and family members with the pet—in case it gets lost.
- Cash: ATMs and credit card readers may not work for several days after a disaster, so consider keeping enough cash on hand to cover food, lodging, gasoline and other necessities for a few days, at least. If you’re keeping emergency documents in a safe deposit box, you should also include a spare key to that box in the kit you keep at home. Besides having a small amount of cash readily available, it’s a good idea for your plan to encompass an emergency fund that ideally can cover three to six months of essential living expenses, held in a savings account or other cash-equivalent investment that is relatively safe and liquid.
- Contact information: Make a list of “in case of emergency” telephone numbers, email addresses or other means of connecting with people you may need to reach in an emergency. This could include: family and neighbors, employer, landlord or mortgage company, insurance agent, banking institution, lawyer, broker or financial advisor. You should also make sure your financial advisor has up-to-date contact information for you, possibly including a designated secondary or emergency contact.
- Important financial documents: These could include mortgage documents, property deeds, insurance policies, and legal documents related to powers of attorney, medical directives, wills and trusts. It’s a good idea to keep recent copies of your bank, retirement and investment account statements—they can serve as proof of account ownership, as well as a record of account numbers, routing numbers and institution contact information, in case funds need to be transferred. Tax returns from the previous three years may be required to apply for some new loans or to qualify for income-based assistance. You should also keep copies of medical documents, such as physician contact information, insurance ID cards, Medicare/Medicaid cards and current prescriptions.
- An inventory of your belongings: Having a record of what you own can help maximize the benefit from insurance policies and speed the insurance claims process. Your record could be a list of items, photographs, or video—or a combination of all three. Take close-up photographs of valuables such as jewelry, watches or small electronics, including serial numbers. Consider saving receipts for expensive items like furniture, computers and televisions. This is also a good time to review what your insurance covers—for instance, homeowners insurance typically doesn’t cover flooding, so if you’re in a flood-prone area you may need to purchase additional flood insurance. You also should make sure you have enough insurance to cover what you currently own, and be aware of deductibles and other exclusions from any insurance coverage.
This is just an overview of items that can help you start the recovery process after a disaster—your financial plan could include many more, depending on your and your family’s needs. For more comprehensive information about financial preparedness, including useful checklists, check out the “Financial Preparedness” page of the Department of Homeland Security’s Ready.gov website.