Many people refuse to entertain the idea of natural calamities. It sounds pessimistic and at the same time, it seems there is one in a million chance that it would strike you. But what if it will? Are you prepared?
Are your finances secured from the unexpected events of nature?
We can’t predict anything but still, we need to be proactive in case it happens. Better safe than sorry, right?
So here are the things to do before, during, and after a calamity.
Before a calamity:
Create an emergency fund
It’s recommended to have an emergency fund equivalent to at least three to six months’ worth of living expenses. There’s no limit. Just save until you feel it’s enough. You can save little by little though by allocating a portion of your monthly salary to it. You’ll just be surprised how much it has accumulated over time.
You won’t know when you’ll be needing this so make sure you got a cash box in case power lines are cut and ATMs are unavailable. (But don’t put all your savings in a cash box.)
Aside from owning a cash box, it will not hurt to invest your money on short term investments. Why? It is more liquid and can easily be withdrawn compared to long term ones. A portion can be put on long term investments like stocks and bonds but make sure you have kept an amount enough to sustain your needs and cover your expenses.
Get an insurance
Get insured. You won’t feel its immediate benefits but it could save you when an emergency happens. Start now. The longer you delay it, the more it gets costly.
Already got one? Good job! Now, it’s time to review your policy. Make sure you understand its coverage. How are your assets protected? On what kind of disaster are you insured? Insurances are very specific on this so revisit and clarify with the insurance agents.
Create an emergency financial kit
Aside from a survival kit consisting of goods, medicines, and other supplies, a kit for financial documents should be organized and kept handy too especially if there’s a need to evacuate.
Every important document must be put together on one disaster-proof box. This includes
- Bank Records
- Real Estate Documents
- Investment Certificates
- Insurance Policies
- Birth Certificates or other Identification Cards
- Extra cash/ Debit Cards
Having secured electronic copies could help as well.
But then, what to do assuming you got caught at the moment of a calamity?
During a calamity:
Avoid panic buying
Everyone should stay calm. People should only buy what they actually need and according to their means. Stop hoarding goods. Update yourselves with reliable information and observe planned buying. List down what are essentials. You won’t know when a calamity will end, so just buy enough or it might go to waste.
Set up auto-debit payments
If you are unable to go outside the house and won’t be able to pay your bills, you may set up auto-debit payments so as not to worry about possible penalties.
But given the circumstances, considerations from creditors might be available like allowing you to defer payments or waive late charges.
Save your receipts
Keep all receipts of expenses incurred due to the disaster. You may be entitled to tax benefits when the government certifies your residence as a disaster relief area. This will be your supporting documents when filing a claim.
After a calamity:
Get yourself together and assess your financial situation. Determine the extent of damage the disaster caused. It is easier to come up with better strategies if you accept and understand your current financial standing.
File an insurance claim
This is why insurance is important. Insurance helps you recover your losses.
You must be able to substantiate the fair value of your assets so it is better if you have kept numerous photos, receipts, and other supporting documents to prove the value of your valuables such as jewelry, paintings, major appliances, etc. before the disaster strikes.
Scope the damage and talk to your insurance agents to have you assisted with your claims.
Seek Financial Assistance
To assist you go through the recovery process, you may apply for disaster assistance from the government or other non-profit organizations. If you own insurance, they may cover those not included in your insurance policy.
Take advantage of available aid. Tap relief resources and maximize your remaining money.
Some offer financial recovery counseling which is really helpful given your condition.
In the aftermath of a natural calamity, it is still a relief that you get out of it alive and safe. Putting your financial life back in order might take some time, but with a proper plan of action, everything will be back to normal or might go just even better.