Show #356 Airing Sunday, 9/10/06
Our daily lives can be terribly disrupted by a major disaster, like Hurricane Katrina, or even a local emergency, like the blackout or the recent floods. Yes, we vow to make those emergency plans. And then…well, you know what happens. We don’t do anything. Well, here to give us a firm push to create an emergency financial plan, NOW, is our firm but friendly financial analyst, Jim Lineweaver. Jim is founder of the Lineweaver Financial Group.
Question: This summer has really served as a reminder that we should take care to financially prepare ourselves for emergencies, right?
Answer: With the flooding this summer, we have been reminded that we do not know when disaster will strike, or when we will face an emergency. But if we put some time into planning for an emergency, its impact on us and our lives will be lessened.
Question: You've made a list of steps we can take to make sure we are ready if an emergency strikes. Let's go through them:
Be Organized.
If you have to leave your house in an emergency, or if you have to get your fingertips on important information while under the stress of losing a loved one, will you be able to? If you have an organized filing system, you will have an advantage.
A great place to start would be to create a master list of important information, so if you have to leave in a moment's notice, you will be able to grab it and run. Suggestions for items to have on this list include numbers for all bank accounts, credit card numbers, investment accounts, and insurance policies. Be sure to include telephone numbers for all of these accounts so you can reach them if necessary.
As you start to develop you own list, you will think of other things to add. And if you feel comfortable, let another family member know of the list and its location so they can step in and help you if necessary.
Have an Emergency Fund
Everyone needs a fund that is completely liquid to help you weather emergencies. While you don't want to keep an excessive amount of cash on hand at home, if we experience an emergency you may need cash to purchase daily supplies.We have become a society that relies on an electronic banking system; and if that system is temporarily unavailable, having cash in your pocket will be a great asset.
What if you are incapacitated and cannot access your own emergency fund? Give a trusted family member Power of Attorney over your emergency fund to enable them to step into your shoes and help manage your affairs when you can't.
Review Your Insurance Coverage
It does not do any good to review your insurance coverage after a disaster strikes; it's too late at that point. To be prepared, it's a good idea to review all of your insurance coverage on an annual basis. Know what kind of coverage you have, and what types of disasters are covered and not covered. You are paying for coverage; make sure you are getting what you think you are paying for.If you were to have a large personal property coverage claim, could you adequately list all of your possessions? You will be better able to do so if you have prepared an inventory of your more valuable belongings. If this sounds like a lot of work, you can make the task easier with the use of a camcorder. Just make a video tape of your belongings as you walk through your house and narrate what you see. After you have made the tape, store it in an "off-site" location. Discuss the tape with your insurance agent; this could bring up a lack of coverage you didn't know you had.
Create an Emergency Evacuation and Communication Plan
If you had to leave your home, where would you go and would you be able to get there by avoiding the major highways? Major highways could become impassable if a disaster were to strike. But if you have a pre-arranged contingency plan, you might be able to avoid lengthy delays.Make sure you let family members know where you plan on heading; and if they live in the area, use your emergency destination as a family gathering place. Likewise, have an out-of-town contact pre-arranged so that everyone can use that one person to call and let them know of their whereabouts.
If you have elderly family members, make sure you include them in your emergency plans. If you have no power, heat or water, there if the possibility that your elderly family members could be in worse shape than you are.
The Boy Scouts have it right-be prepared! For more information or an emergency checklist give Jim Lineweaver a call. Don't procrastinate.
