In the last couple of months, we’ve witnessed one natural disaster after another. Hurricanes, wildfires, earthquakes, flooding—you name it. The truth is that these things aren’t a matter of if; they are a matter of when.
I personally went through Hurricane Irma in South Florida. Thankfully, my area didn’t get the worst of it, but it was still enough to throw the entire state for a loop. There was no power for days, cell service was down, debris was everywhere, and the internet didn’t work for at least a week.
Natural disasters can also really throw a wrench in your finances. And as hurricane season is still upon us, I wanted to highlight some things you can do to prepare financially for a natural disaster—whether you’re expecting one or not.
Stock Up On Emergency Savings
I technically have two emergency funds. One is a regular savings account where I can withdraw the cash quickly. Another is extra cash I have invested outside of my retirement accounts so that my money makes more money.
I have my contributions to these accounts set on autopilot so that I can set it and forget it. If I have a month where I make more money than usual from my business, most of it goes into one of these two accounts.
Because of Irma, I was out of work for a little bit. When that happens for a week or more, your income can take a dip. Had it not been for my emergency savings, I may not have been able to pay rent that month.
Pay Bills Early
With natural disasters you know are coming (like hurricanes), you need to pay your bills before the disaster strikes. The reason is because you don’t know how long you’re going to be without power or phone service.
In my case, I ended up paying my quarterly taxes several days in advance. It turns out that if I’d waited, I would have missed the deadline due to not having power or internet. I also set my other bills to be automatically paid in case I was without power for longer than expected.
Some bills (like federal student loans) will postpone your payments if you’re affected by a natural disaster. But if you don’t need to pause payments—and maybe pay extra interest as a result—don’t bother.
Know What Your Insurance Covers
If you have homeowners or renters insurance, you need to know what your specific policy covers before a disaster hits. I witnessed several friends have a rude awakening when they found out their insurance didn’t cover flooding or wind damage.
Take Out Cash
The final step in financially preparing for a natural disaster is to take out cash. If the power goes out, you will have no access to ATMs. No power also means that the limited number of stores that may be open won’t be able to run credit cards.
Sure enough, a couple of days after Irma hit, one grocery chain opened. Their point-of-sale systems were down, so everything had to be paid for with cash. Thankfully, I didn’t have to use the cash I took out on supplies. Now, it is sitting in a safe place in case there is another big emergency where I should need it.
Have you ever dealt with a natural disaster? How did you prepare your finances? Sign up or log in with your Salt account to share your experiences.