The Federal Emergency Management Agency (FEMA) has found that 61 percent of surveyed Americans have not created or practiced an emergency plan, while 80 percent of Americans live in counties that have experienced natural disasters. Not having an emergency plan might mean losing a loved one or pet. For small businesses, it might mean financial collapse.
With the unpredictable weather patterns effecting most of the world, there's no real excuse for not being prepared, since so much of it is simply planning, practice, and controlling panic. If you're stressed about money or the different things you might need to buy, here are some tips for emergency preparedness on a budget. Preparation is far less about MREs and much more about having an open and honest discussion of your plans with your family.
Million-dollar natural disasters have touched every single state, and no home is completely safe from one problem or another. They might not be small crises, either: According to the National Oceanic and Atmospheric Administration (NOAA), there have been 26 floods, 25 droughts, 40 hurricanes or tropical cyclones, 15 wildfires, nine deep freezes, 16 winter storms, and 99 severe storms, all costing more than $1 billion since 1980. These are super-storms, and they happen frequently, often requiring families to evacuate.
While yes, it's true that some areas of the U.S. are more likely to be struck by natural disasters than others, each area has its own unique risks that certainly won't make them exempt. That's not to mention that the threat of climate change creates more, more deadly, and more unusual natural disasters.
Then there are still other unlikely but possible scenarios: Tsunamis can affect New York City, volcanoes can affect the central plains, and really, asteroids are always a vague threat we can do nothing about. But it's important to focus on the things we can do something about, what we can (and should) prepare for.
If you live in the Northeast, generally, your greatest risks are flooding, winter weather, and severe storms.
If you live in the South, generally, your greatest risks are hurricanes, tornadoes, flooding, and mudslides.
If you live in the Central U.S., your most likely disaster scenarios are wildfires, severe storms, and, in some cases, extreme winter weather.
If you live on the West Coast, you'll likely contend with earthquakes, winter weather advisories, wildfires, and flooding.
Hawaii is not often a contender for hurricanes, but that risk has been increasing in recent years. There's also a risk of tsunamis, fire, and flooding overall. Alaska suffers from extreme winter weather, avalanches, wildfires, and earthquakes. The state is home to a few volcanoes as well.
It also may be smart to look at the worst disasters in your state and look up information on past extreme weather in your own hometown or county.
Form a plan based on these likely scenarios when creating your emergency kit and figuring out different aspects of your plan.
While these may be possible, the bulk of your disaster planning should center around low-hanging fruit of plausible scenarios and easy changes. Create a disaster plan around those aspects, and maybe touch upon these unlikely scenarios as a thought experiment. And remind your family not to panic!
These disasters are so extreme that they're impossible to prepare for anyway, right? Of course not, as a few simple things you can do as a family will save a lot of trauma, time, and money in the long run.
Sign up for alerts. Be sure to turn on alerts on your smartphone; you'll get Wireless Emergency Alerts (WEA) from the FCC. It might be a good idea to download the FEMA mobile app. If you don't have a smartphone, know that there's also the National Oceanic and Atmospheric Administration's Weather Radio.
Find out how to make your home safer. Regularly check your home for safety issues.
Fill out and print numerous copies of your Family Emergency Communication Plan sheet. Organize all of your emergency numbers, and make sure everyone in the family has a copy of this sheet. Kids in school might even want to give the sheet to their teachers.
Create and communicate your plan with your family (see the next few sections). Use this plan from the American Red Cross, or create an outline based on what to do during each of the most likely emergencies in your area.
Create an evacuation checklist. There's a lot that needs to happen really fast during an evacuation, including things that could save you thousands in repairs, from turning off power to grabbing your supplies. Creating a checklist and leaving it on your fridge can help control the chaos.
Delegate tasks and plan for people and pets who cannot self-advocate. The shortage of time requires that other who are capable in the group will need to pitch in. Give everyone who can do a job a safe, clear task. A child might need to grab your pet. A parent will need to turn off utilities.
Test your communication. Make sure everyone knows their role in an emergency, where they're supposed to be, and how to communicate with each other. Create a phone plan and test it out frequently, making sure everyone knows what to do next.
Practice drills as much as possible. More than your communication plan, it's important to practice drills, especially for kids. Make sure they have visited and know how to get to your meet-up spots on their own. Practice as many times as you can for different scenarios.
Create your disaster kit. We'll go into detail about what you'll need. Don't forget copies of your family's most important documents, like IDs and insurance information.
It's important to make sure that all adults in the household have the same plan and communicate the same information. For everyone else, here are some tips.
Remember: Children are likely to be at school when an emergency hits!
If you have a very small child or a baby, caring for it can be very difficult during a natural disaster. They will be obviously unable to communicate and need a lot of care during an evacuation situation. Be sure to delegate tasks in this case; one person should be looking after the baby while other adults can help everyone else.
Disasters can be very difficult for disabled people and seniors, who have their own mobility and packing needs. Make sure each person has their own list of items to grab or even their own emergency kit. Never make assumptions about their situation, and be sure to check on them and offer help.
It might be too nerve-wracking and you may not want to talk to random neighbors, but your neighbors are the most important group to know well if and when a disaster happens. If at all an option, try to get the ball rolling in your neighborhood to do at least one, if not all, of these things:
Obviously, you can't exactly talk to or rehearse an emergency with your dog, cat, or other type of pet. But it's pretty unforgivable to leave your pets behind. Avoid the last-minute panic of taking care of your pet by doing some prep work.
You don't have to be a survivalist to learn basic skills and do some simple prep work outside of your plan and your kit.
The absolute simplest thing you can do right now is take FEMA's free, simple Web-based training program and learn the simplest ways to help. The five steps are to call 911, stay safe, stop the bleeding, position the injured, and provide comfort.
If you don't want to take a CPR class, know that pushing on the chest hard and fast to the beat of "Stayin' Alive," the disco song, is almost all you need to do.
Another easy way to level up your knowledge is an online course. Note that there are also courses on child and baby first aid.
Usually, the resource to use is a few droplets (just a few!) of unscented bleach, which is important to pack in your kit.
If you're in doubt, throw it out!
Practice setting up shelter, unplugging, and a lot of skills you'd need in an evacuation situation while in a safer environment. Camping is a fun way to test out any of the gear in your emergency kit. If you are on the fence about buying gear just for a theoretical emergency go camping! Sleeping bags, waterproof tents, and thermoregulated gear are great if you lose heat or your home floods. This way you can have fun with the gear and still have it stored safely in your house if an emergency ever happens.
Locate the electrical box and natural gas line in your home so you can find them and easily shut them down before leaving for an evacuation without scrambling.
Most homeowners' insurance doesn't cover important things like flooding, so if flooding is a threat for your area, see how much it would cost to add coverage.
Use this disaster preparedness checklist to buy and organize the specific items you need. It would be smart to keep these items together or even in an easy-to-grab suitcase or stuff it all together in a trash can. There are numerous ways to organize and save your supplies.
Water:
The general wisdom is one gallon per person per day for a minimum of three days.
Food:
Keep a supply of nonperishable food (such as cans) for a minimum of three days
First Aid Kit:
The Red Cross recommends all of these items in your kit, or you can buy a prepackaged one with a coupon. Remember: it's not just Band-Aids!
Tools:
You'll need a can opener for the food, wrenches or pliers (for turning off your utilities), and perhaps a hammer (if you'll need to make camp).
Sanitation Supplies:
You'll want moist towelettes, garbage bags, and plastic ties.
Flashlight:
Always bring extra batteries!
Whistle:
You should also have a whistle to signal for help.
Copies of Important Documents:
In a waterproof, safe container, store important family documents such as bank account information, insurance policies, copies of IDs such as your driver's license, reference materials or how-to survival books, and any traveler's checks. You may also want to hide some cash in this container. Make sure it's not easily stolen.
Blankets and Clothing:
Grab a change of clothes and a blanket for each person.
Matches:
Keep them in a waterproof container. A knife and ferro rod can work in emergencies, too, assuming you can find a dry area.
Take the time now to set aside these materials. Other ideas of less-necessary-but-helpful things to add might include a mess kit for food (like plates, knives, and forks), books to read, games to play with the kids, or other leisure activities to keep everyone calm.
From natural disasters like hurricanes and floods to public health and ecological crises, there are many circumstances for which you should be financially prepared.
The key to financial emergency preparedness is proper planning. You need to take stock of your income streams — such as an annuity, 401(k) or IRA plan, a salary or other source — budget appropriately and prepare for the unexpected.
Financial emergencies can happen to anyone, and without a plan, you may find it difficult to bounce back from damages. In turn, this could put your credit score at risk and even cause you to file for bankruptcy.
We hope disaster never strikes — but in today’s climate we also know nothing is guaranteed. So why not do a little legwork upfront to ensure you’re financially healthy no matter what? Here, we cover what to do with your finances before, during and after a disaster to ensure you’re protected.
Multiple recent studies have shown that Americans are woefully underprepared for disasters and the sudden expenses that often come with them:
Rarely do people regret being too prepared — it’s the opposite that’s all too common. To ensure you and your family don’t fall under the statistics above, consider taking the time to set up a few things now.
If a disaster does strike, you may not be able to leave your home or travel very far. If you’re in the workforce, contact your employer to set up direct deposit. This will ensure you get paid even if you’re unable to make it to the bank. It also reduces your risk of check fraud or lost checks and gives you immediate access to your money, which may be important during a disaster when many are under financial strain.
Furloughs and layoffs are common during disasters as companies look for ways to cut costs and stay afloat. It’s important to have a cushion that can supplement your income — or replace it, in the worst-case scenario.
If possible, aim to save six months of income so you can continue to cover essential costs while you search for a new job. If you can only set aside three months of income, that’s still a great start. Even if you never find yourself in a disaster situation, having a solid emergency fund can help cover other unexpected costs like car repairs.
In retirement, an emergency savings fund is important so that you don’t have to dip into your 401(k), IRA or other income source to cover costs. How much you’ll need depends on how much you spend each month on housing, food, utilities, transportation, health care and other expenses. Retirees should aim to save enough money to cover eight to 12 months of expenses.
The most important thing to consider is that emergency funds should be easily accessible. Consider a high-yield savings account for better interest rates and easy transferability to your checking account.
The purpose of insurance is to cover you in case anything bad happens. It’s an important part of financial emergency preparedness and you’ll be glad you invested in it if a disaster ever strikes. If you’re a homeowner, you likely already have an insurance policy.
Many policyholders are surprised to learn that standard homeowners insurance policies don’t contain flood coverage by default. If your area is prone to flooding, look into adding flood protection to your policy.
If you’re not a homeowner, you may think you’re covered under your landlord’s homeowners insurance policy. While this is true for the structure of the home, it doesn’t cover your belongings. That’s where renters insurance comes in. At just $20 or less each month, it’s a worthwhile investment.
In addition to collision insurance, consider comprehensive car insurance, which will cover your vehicle from the most common natural disasters, including floods, fire, hurricanes and earthquakes. It’ll also cover you in case of smaller-scale damages that are out of your control, like a tree falling on your car.
Life insurance covers the unlikely occurrence of death via natural disaster. It can help your family pay off debts and cover housing payments and living expenses in the event of your death. It is an important part of your financial emergency preparedness plan.
It may be tempting to cut corners on insurance now in order to save money, but investing in the right coverage will save you much more if you ever need to file a claim.
Create a thorough home inventory that includes everything in your home, from furniture to kitchen appliances to clothing. Even if you don’t have any big-ticket items, the cumulative value of your belongings can add up quickly.
Home insurance is designed to protect not only your physical home structure, but also all of the belongings inside. If you ever need to file a claim, having documentation of your belongings — including photos, descriptions and estimated value — will make the process go more smoothly.
We live in a digital age, and it’s all too easy to store your important financial documents online. Back up tax returns, insurance information, receipts and more via a cloud storage system so you can access them from any device — but make sure you have physical copies, too.
In the event of a natural disaster that causes you to lose power or internet access, you’ll need paper versions of your documents kept safe in a fire-proof, water-proof container.
Locate and print out the following, if applicable:
Keep these papers somewhere easily accessible to ensure you take them with you in the event you have to suddenly evacuate your home.
If you do end up finding yourself in a disaster or emergency situation, you’ll be thankful you put in the work to form a plan. Unprecedented events often pile on extra stress, but if you’re financially prepared, you’ll have one less thing to worry about. That way, you can focus on keeping yourself and your loved ones safe.
Depending on road conditions, your transportation situation and whether businesses are operating, you may not be able to physically travel to a bank. If you’ve set up direct deposit, you’ll have instant access to any income. If not, take advantage of mobile banking. Most large banks have apps that allow you to scan and deposit paper checks and transfer money between accounts. You’ll also be able to make timely credit card payments, which is crucial in making sure a disaster doesn’t cause your credit score to take a hit.
Another measure you can take to ensure your credit doesn’t take a hit if you’re finding it difficult to make monthly loan and credit card payments is to contact your creditors. Ask if there are any forgiveness policies given the extenuating circumstances. Many credit card issuers will offer emergency support, especially if the effects of the disaster are widespread. This may entail collection forbearance or increased credit limits.
Consider reaching out to any company to whom you make regular payments, including:
During a disaster, you likely have a lot on your mind, and manually paying bills may easily slip through the cracks. If you sense a disaster situation is imminent, set up automatic payments so that you don’t have to worry about late or forgotten payments.
During times of hardship, it’s best to examine your budget and see what unnecessary expenses you can cut. This will ensure you have plenty of funds for necessary expenses and that you can cover any unexpected costs with the help of your emergency fund.
Budget categories that you may consider temporarily cutting or reducing during a disaster may include:
Reallocate this money to focus on necessary expenses or sock it away if you anticipate hefty repairs or medical bills after the disaster is over. You may also opt to donate this money to disaster relief organizations.
In a crisis or disaster, oil prices and stocks will likely plunge. Businesses may struggle and the economy may take a turn for the worse. But good investors know not to panic at the first sign of a dip. According to the Center for Retirement Research at Boston College, active investors, or ones who shuffle around based on new information, tend to do worse than passive ones who remain hands-off with their investments. Remember that your investments are long-term and that they’ll likely bounce back. If you’re worried about your investments — retirement or otherwise — consult your financial advisor.
Once the disaster has passed and you begin to resume normal life, there are some immediate action items you’ll want to take care of to best assist your recovery.
Scammers use disasters as a way to target people, particularly seniors, when they’re already under significant stress and financially vulnerable. According to the United States Senate Special Committee on Aging, seniors lose nearly $3 billion annually to fraud.
There are many different types of scams involving health products, charity imposters, stocks, taxes, jobs and more.
To spot a scam before it causes financial hardship, keep an eye out for any of the following:
If you suspect you were the victim of a financial scam during a disaster, call the U.S. Department of Justice’s disaster fraud hotline at 866-720-5721 or submit a complaint online.
After a major crisis, it’s common for employers to allow workers a bit of time to regroup and get their affairs in order. If the disaster has caused you to miss work, ask your boss how much sick leave or paid time off you have accrued. If a disaster has made it dangerous to return to work, or if working conditions are clearly unsafe, ask if you are able to work remotely. If not, you may be protected under the National Labor Relations Board and the Occupational Safety and Health Administration. Examine these laws to see if your situation protects you from employer retaliation.
In the wake of a natural disaster, you should assess any damages. If a disaster event caused damage to your home, car or belongings, do not throw anything away. Take photos of the damage and keep them on file for the claim and inspection. If there are immediate repairs required for the safety and livability of your home, take care of those right away.
You then have a year following the disaster to file a claim, following these steps:
If your damages aren’t covered by insurance, you may be eligible for a disaster relief program.
Many homeowners are eligible for assistance from FEMA if they are “in a declared area whose essential property has been damaged or destroyed and whose losses are not covered by insurance.”
You may also qualify for local disaster assistance. Google your city + “disaster relief” to find local organizations that may be able to help.
Other disaster assistance programs for which you may be eligible include:
If you come to realize after a disaster passes that you had not set yourself up in the most optimal way, use the situation as a learning experience. Take note of things you could have done that would have made your recovery process smoother. While you would never hope to encounter another crisis, it may be easier the second time around with better preparation.
Here are some action items to consider:
Disaster recovery takes time and patience, and everyone’s timeline looks different. Remember that you’re not alone and that there are resources available to aid those that need it the most.
For additional information pertaining to financial emergency preparedness, explore the federal resources below:
No one expects a devastating event, and we can never be fully prepared for everything. But having a solid financial preparedness plan can pay off in huge ways if disaster ever does strike.
Building solid savings, creating a preparedness plan and reading up on available resources can help protect your financial well-being. It will also give you the peace of mind of knowing you’ve done your part to prepare for whatever comes your way.
Please seek the advice of a qualified professional before making financial decisions
Feeling confident in your plan? Spread the word about how easy it is! And if you're super-confident, see if there are ways locally to get involved with community preparedness.