Be Ready When A Dis­as­ter Strikes

The Oakdale Leader - - PERSPECTIVE - By BILL SPANIEL Cal­i­for­nia So­ci­ety Of CPAs

What will it take to get you back on your feet fi­nan­cially if a dis­as­ter strikes?

Whether it’s a nat­u­ral dis­as­ter, such as a wild­fire or earth­quake, or an ac­ci­dent like a house fire or burst wa­ter pipe, an un­ex­pected emer­gency can wreak havoc. You can get your fi­nan­cial life back in or­der, ac­cord­ing to the Cal­i­for­nia So­ci­ety of CPAs (CalCPA.org), by fol­low­ing these tips.

In­sure Against Po­ten­tial Loss

Hav­ing the right in­sur­ance can help lower your out-of-pocket costs. Home­owner’s in­sur­ance can cover dam­age to your home or per­sonal prop­erty due to a va­ri­ety of mishaps, and renter’s in­sur­ance can re­im­burse you for the loss of your own be­long­ings when you don’t own the res­i­dence your­self.

If you’re in a flood zone, find out if your pol­icy cov­ers floods or if you need ad­di­tional cov­er­age. Don’t for­get auto in­sur­ance, as well, to pro­tect you from ex­penses re­lated to road ac­ci­dents and other types of dam­age, such as hav­ing a tree fall on your parked car.

Save Up For Emer­gen­cies

Even with in­sur­ance, you may be hit with a range of re­lated ex­penses if, for ex­am­ple, you have to stay in a ho­tel or eat out un­til dam­age to your home or neigh­bor­hood is ad­dressed, or if your in­sur­ance pol­icy doesn’t cover all your losses. An emer­gency fund with sev­eral months’ worth of in­come can keep you on your feet af­ter a dis­as­ter.

It’s also re­as­sur­ing to have in case you or your spouse loses a job or is hit with any type of un­ex­pected ex­pense. Be sure the money will be easily ac­ces­si­ble if you have to re­lo­cate af­ter a dis­as­ter.

Keep Key Doc­u­ments Safe

What kinds of pa­per­work will you need in an emer­gency? De­pend­ing on the si­t­u­a­tion, it may be im­por­tant to have in­for­ma­tion about your in­sur­ance poli­cies, prop­erty records, fi­nan­cial ac­counts, med­i­cal records and con­tacts for fam­ily, doc­tors or other key peo­ple.

Make a copy of crit­i­cal doc­u­ments you could need in an emer­gency and store them in a safe place out­side your home. A safe de­posit box at your lo­cal bank is one pos­si­bil­ity but also con­sider send­ing them to a rel­a­tive or close friend out­side your im­me­di­ate area in case it’s tough to get to your bank af­ter dis­as­ter strikes your area.

Ar­range to Keep Bills Paid

If you have ac­cess to on­line bank­ing, set up au­to­matic pay­ments for re­cur­ring bills, such as those for rent or mortgage and util­i­ties, so you can fo­cus on more im­por­tant daily con­cerns dur­ing a cri­sis.

If you’ve lost your source of in­come tem­po­rar­ily or are go­ing to have dif­fi­cul­ties keep­ing up with bill pay­ments for other rea­sons re­lated to the dis­as­ter, con­tact your cred­i­tors im­me­di­ately and ex­plain your si­t­u­a­tion. Many may be will­ing to re­duce or sus­pend your pay­ments un­til you’re back on your feet.

Also con­tact your em­ployer to find out whether the busi­ness has been af­fected and the company’s plans for stay­ing or get­ting up and run­ning. If you’ll be out of work be­cause of the dis­as­ter, con­tact your state unem­ploy­ment in­sur­ance of­fice to see if you qual­ify for unem­ploy­ment in­sur­ance.

Learn about ad­di­tional avail­able gov­ern­ment dis­as­ter re­lief as­sis­tance from sites like FEMA. gov or from the Small Busi­ness Ad­min­is­tra­tion site if you’re a busi­ness owner.

Your CPA Can Help

If you need advice af­ter a dis­as­ter, reach out to your lo­cal CPA. He or she can help you de­velop a straight­for­ward plan to keep your fi­nances on track dur­ing a try­ing time. Visit CalCPA.org/find­acpa to find one near you.

For more in­for­ma­tion on how to pre­pare for an emer­gency, check out this Dis­as­ter and Fi­nan­cial Plan­ning guide: https:// tinyurl.com/aic­pafin­plan.

The Money Man­age­ment col­umns are a joint ef­fort of the AICPA and the Cal­i­for­nia So­ci­ety of CPAs as part of the pro­fes­sion’s na­tion­wide 360 De­grees of Fi­nan­cial Lit­er­acy pro­gram.

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