- Hurricane Irene Captured August 24, 2011 by NASA Goddard Photo and Video, on Flickr
Like many of my readers I have begun to prepare for Hurricane Irene, which is currently barreling its way up the U.S. east coast. My wife is out buying water, food, flash lights and copious amounts of other necessary and maybe some unnecessary emergency supplies.
We are of course quite concerned that our New York City apartment will be flooded if Irene hits Manhattan directly. In addition, we have to figure out where we will go, where will we sleep and we are working very hard to make sure where ever we stay has air conditioning!
I watch TV and read new stories and it seems everyone is planning and preparing for the worst Irene can throw at us.
All of this emergency planning has got me thinking: Are even half of the people around me as prepared for a “Financial Hurricane” or other emergency? My guess: NO, people are generally unprepared for an unforseen event that causes financial distress in their lives. Well, not to worry because today we have included a Personal Finance Emergency Checklist.
5 Ways to Prepare for Financial Emergency
- Cash on Hand: Always have emergency funds in cash at an accessible bank or financial institution in an amount equivalent to at least 6 months worth of expenses. I know you earn very little interest on this cash, but consider the lost upside a “premium” that you need to pay to feel safe at night and to protect your family.
- Health Insurance: Let’s face it health insurance is expensive and its not getting any cheaper. BUT, it is totally necessary and important for your well being. I know that when I did not have health insurance I slacked on preventive care, which ultimately led me to get sick! If you run into an emergency without health insurance you will probably receive the same treatment in the hospital, but you will receive NO help with the massive costs you will face on the back-end.
- Life Insurance: Experts recommend enough life insurance to cover at least 6-years of annual pay. Why? Do you want to leave your love ones with anything less? Also, be sure to insure both parents, even if one is a stay at home mom or dad. When you have kids the workload doubles no matter how you slice it.
- Back-up financial files: Everything is electronic these days so why does this matter? Well, what if you computer is in the house that gets flooded? How do you recover all of your important and private financial data? Look into secure web-based back-up services to ensure your data is protected. Check out www.iDrive.com for backing up your PC, iPad and even your iPhone.
- Live within Your Means: In short, no debt or little debt means less stress. In a prolonged fiscal emergency situation debt can accumulate quickly due to unexpected costs. If you already have a significant debt load this emergency will double your pain. Check out this post about the costs of debt
The bottomline is that is better to be safe and prepared rather then sorry and broke.
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