In Case Of Emergency — 5 Tips To Disaster-Proof Your Finances

Posted on: 21 February 2023

When a natural disaster strikes, your top priority is the health and well-being of loved ones. But you also need to weather the storm — literally or proverbially — financially. How can you do this? Here are a few tips to protect your finances through any disaster. 

1. Have Some Ready Cash

After a disaster, you usually need access to very liquid cash during the immediate hours, days, and weeks that follow. Do you have cash handy and accessible in both physical and virtual forms? This usually takes the forms of actual greenbacks in a safe, cheap-to-access credit (like a pre-established HELOC), and cash-like instruments such as savings accounts or CDs. 

2. Maintain Diversification

Most natural disasters hit certain markets while leaving others unaffected. If your area suffers a flood or earthquake, sales and earnings in the local area may be seriously damaged. But the rest of the world will continue as normal. Some disasters hit some industries — like travel — while boosting others, like staples. Diversification of your investments ensures you never suffer too much from one market's economic damage. 

3. Check Your Insurance

Insurance is the unsung hero of wealth management and financial planning. It's not as exciting as building up a big pile of money, but it can save all your other assets. Evaluate your insurance coverage annually to ensure you stay abreast with changes in your life and various markets. 

4. Protect Important Documents

Make sure you protect and can access necessary documents in an emergency. These documents include bank and credit card numbers, powers of attorney, passports, birth and marriage certificates, brokerage accounts, and recent tax returns. Use a safe at home to store important documents like these. But the more you can move these online, the less you'll have to worry about losing them in an emergency. 

5. Build Streams of Income

Finally, do you have more than one stream of income? If your workplace shuts down due to a disaster, will you continue to receive other income? What if it takes time for your business to get up and running properly? Become one of the millions of Americans who develop a side hustle or passive income stream before disaster strikes. It might be anything from owning a rental unit to self-publishing or building a consultancy gig. 

Where Should You Start?

Could you use help getting your finances ready to withstand a disaster? Start by meeting with a financial planning service in your area today.