Download the Schwab app from iTunes®Close

Do You Have a Financial Emergency Plan?

With all the bad news over the past year, few of us want to entertain the prospect of future disasters. Yet even a little preparation can make a big difference in the face of an emergency—and may even help you sleep a little easier in today’s uncertain world. Here are some practical tips to get you started.

  • Sock away an emergency fund: Try to have enough cash on hand to cover three to six months’ worth of essential expenses, saved in an account you can access immediately. If you suffer a significant loss, this money can help bridge the gap until you receive an insurance payout or any government assistance for which you may be eligible.
  • Shore up your cash reserves: If you’re retired, try to avoid tapping investments in the midst of a downturn by having a year’s worth of expenses in relatively liquid investments (a high-yield checking account or a money market fund, for example), plus another two years’ worth of funds in bonds or short-term certificates of deposit. Likewise, if you’ll need money in the coming few years to fund other goals—such as paying for college or purchasing a home—consider investing those funds in a relatively conservative portfolio of bonds and cash, with few, if any, stocks.
  • Check your insurance: Review your homeowner’s or renter’s policy to see if you’re adequately covered. You also may want to talk to your agent about whether you should consider additional coverage, such as earthquake, fire, or flood—or umbrella insurance for losses not covered by the other policies.
  • Protect important documents: If the unthinkable happens and your home is destroyed, you’ll need certain documents right away to start the recovery process. Put copies of birth certificates, driver’s licenses, insurance policies, passports, trust documents, wills, and other key financial records in a fire- and waterproof box. Better yet, keep digital copies of important documents in a secure online location so you can recover them from anywhere.
  • Inventory your valuables: Take extensive photos or video of your home and valuables, then save them securely online or on a thumb drive in a fire- and waterproof box. This will make insurance claims much easier in case of fire, flood, theft, or other damage.

What You Can Do Next

Need help thinking through your emergency plan? Call 800-355-2162 to request an appointment with a Schwab financial consultant.

Important Disclosures

An investment in the Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund.

The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision.

All expressions of opinion are subject to change without notice in reaction to shifting market conditions. Data contained herein from third-party providers is obtained from what are considered reliable sources. However, its accuracy, completeness, or reliability cannot be guaranteed.

Examples provided are for illustrative purposes only and not intended to be reflective of results you can expect to achieve.

Diversification and asset allocation strategies do not ensure a profit and cannot protect against losses in a declining market.

Investing involves risk, including loss of principal.

Fixed income securities are subject to increased loss of principal during periods of rising interest rates. Fixed income investments are subject to various other risks, including changes in credit quality, market valuations, liquidity, prepayments, early redemption, corporate events, tax ramifications, and other factors.


Thumbs up / down votes are submitted voluntarily by readers and are not meant to suggest the future performance or suitability of any account type, product or service for any particular reader and may not be representative of the experience of other readers. When displayed, thumbs up / down vote counts represent whether people found the content helpful or not helpful and are not intended as a testimonial. Any written feedback or comments collected on this page will not be published. Charles Schwab & Co., Inc. may in its sole discretion re-set the vote count to zero, remove votes appearing to be generated by robots or scripts, or remove the modules used to collect feedback and votes.