Financial Planning For A Natural Disaster

By | December 26, 2016

Financial Planning For A Natural Disaster

Imagine a relaxed Saturday afternoon. Like most other weekends, you’re just laying on your couch, binge-watching your favourite TV series and ordering take-out with your Credit Card. Life’s good. You have your favourite snacks stocked up and you couldn’t feel more relaxed. Suddenly, the fan and photo frames in your hall start to shake. Since you love watching Supernatural, you think it’s probably a ghost of some sort. But, as the tremors start getting stronger, you realise it’s something much worse. It’s an earthquake!

You leave everything behind and rush out to save yourself. We don’t blame you for not carrying your valuables along. In a situation like this, personal safety should take top priority. You’re glad that you escaped the wrath of those tremors. But, sadly, your house and car have been buried under a ton of rubble.

You survive the disaster, but do your finances survive it too? Do you have enough saved up as an emergency fund to help you sail through the tough times ahead? You can’t just blame it on nature. You need to ensure that you’re well-prepared, right?

Additional Reading: How To Build An Emergency Fund

Don’t worry! The good news is that we can help you plan ahead for such situations. Yes, with the magic of proper planning, you can move on normally with your financial life (even after surviving a natural disaster). So, are you ready? Cool, let’s start.

Label it all

By labelling, we don’t mean sitting down and tagging each and every valuable you possess. We mean classifying them on the basis of their value and storing them accordingly. This way you’ll at least have a vague idea of the whereabouts of important things. Instead of panicking later, you may be able to look in the right places.

If the disaster is severe, you might not be able to recover your valuables, but in case it’s something mild, who knows? Being a little organised from the start could help you out. It may not be a sure shot way to recover all your belongings, but your chances certainly increase if you’re more organised.

Cash is king

While it’s certainly more convenient to carry a Debit or Credit Card on you instead of bundles of cash, the situation changes a bit when a natural disaster strikes. Your cards won’t be of much use if ATMs or card machines stop functioning. That’s why, carrying a certain amount of cash in your wallet or purse could help you and your family deal with any short-term emergencies in the wake of a natural disaster.

Additional Reading: 10 Tips To Using Your Mobile Wallets Right

Listing and Documentation

It is imperative that you have a clear idea of all your bank accounts, Insurance Policies, Fixed Deposits, bonds and any other financial records you may have. Make sure you keep this list handy, both as a soft copy and a hard copy. Facing a natural disaster can be quite draining (emotionally, physically and financially). By taking steps in the right direction, you can at least take care of the financial part. It goes without saying that you must preserve all crucial finance-related documents carefully.

Making and storing lists is good. It helps you stay organised. However, the safety of this crucial information is vital. You can’t leave these important documents wherever you like. If they’re stored on your computer, you must encrypt them, unless you want someone to take advantage of all those records. Storing all your financial passwords in a secured flash drive could be a good option.

All your original finance-related documents need to be stored in a safe place as well. No, not under your mattress! Make sure you make copies of these crucial documents instead of just relying on the originals. Most importantly, you must store both the originals and the copies separately. In case one set gets misplaced or destroyed, you can always rely on the other. All it takes is a little organisation on your part.

Additional Reading: What To Do When Your Account Is Under An Attack

Keep your Insurance policies updated

You need to constantly review your insurance policies and ensure that they make sense. If you live in an area that’s prone to flooding, but your current policy doesn’t cover floods, there’s no point in continuing with that policy.

The whole point of getting an insurance policy in the first place is to get better benefits and cover according to your needs and preferences. Always keep updating your policies according to your changing needs and ensure that you and your family members are fully covered.

Additional Reading: Are You Insured Against Floods?

It’s time to go click-click

No! We don’t want you to start a selfie session. But it helps to keep a record of everything by clicking pictures of all relevant information related to your valuables. These include your electronic devices, gadgets, furniture items, vehicles and other valuables.

Make use of that camera on your phone and take pictures of relevant data like the date of manufacture, details of insurance (if any) etc. It may sound a bit unnecessary right now, but will certainly come in handy in future, especially when making those insurance and tax claims in case of a natural disaster.

Additional Reading: Why Are Car Insurance Claims Rejected?

Emergency fund, where art thou?

The most important resource that can help you sail through a natural disaster is money. No matter how small the amount may be, ensure that you keep contributing towards building an emergency fund. It may seem unnecessary at first but, trust us, once a natural calamity strikes, you will thank us.

But, how to do you go about building an emergency fund? Well, there are a couple of options. If you’re just starting out, you could think of a Recurring Deposit. You can choose the auto-debit option and choose a fixed amount. Every month, that amount will get deducted and directed towards your emergency fund. Later, once you’ve saved enough, you could think of investing in a Fixed Deposit. With good interest rates and safety from market fluctuations, a Fixed Deposit is a great way to build an emergency kitty.

There are, of course, other ways of building this fund. You could consider investing in the stock market. It can help you earn a substantial amount of money in a relatively short time. But, don’t look for shortcuts. Get your basics right before investing and do your research.

Additional Reading: Value Investing

By following these simple tips you can be financially prepared to face any kind of disaster, whether natural or man-made. With a little bit of organisation and discipline you could be back on your feet in no time, come what may.

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Category: Financial Planning

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