Prepare Your Finances for Emergencies
Consumer Financial Protection Bureau (CFPB)
BY DAN RUTHERFORD
DEC 6 2012
Hurricane Sandy reminded us that disasters – storms, fires, floods, earthquakes – can happen to anyone, and when they do you have little time to react.
If you had to leave your home in an emergency, you would only have minutes to choose what stays and what goes, and your financial records may be one of the last things on your mind. So, collecting and organizing your financial information now could help you avoid problems and recover faster.
Keep your account information and important documents in a water-tight container or fire safe, and keep copies somewhere else, like a safe deposit box, a secure place at work, or with a trusted relative or friend. Here is an outline of the items you should gather.
If your house is destroyed, missing a credit card payment may not seem like a big deal. However, ignoring credit card or loan payments could cause your interest rates to jump, costing you more money, and could damage your credit score when you’ll need access to credit most.
If you’re affected by disaster, you’ll need to contact your creditors as soon as possible and let them know about your situation. Most of them will have ways to help. Also, if you are unable to live in your home, check with your utility companies (e.g. electric, gas, cable) to see if you can suspend your utilities to add extra money to your budget. You may want to consider signing up for direct deposit with your employer and electronic bill payment with your utilities to make receiving income and paying bills easier.
Make a list of account and customer service numbers for:
- Checking and savings accounts
- Credit and charge cards
- Mortgage and home equity loans
- Auto loans
- Student loans
- Personal loans
- Cable, telephone, and utility companies
Personal records documents can be replaced, but it can take time. Plus, you may need these documents to verify that you are the owner of the property that was damaged or destroyed in the disaster to receive insurance help or other assistance.
Gather and make copies of:
- Identification, including your driver’s license or passport
- Social security cards
- Birth certificates
- Marriage certificates and divorce decrees
- Titles, deeds, car registrations
Again most financial records can be replaced, but you will need your insurance information if your property is damaged, or if you or a family member needs medical care. Keeping this information safe will also help you avoid trouble if questions arise later about your investments, taxes or workplace benefits.
Gather and make copies of:
- Insurance policies
- A room-by-room inventory of your belongings
- Investment records
- Income tax information
- Pay stubs and employer benefits records
- Wills, living wills, trusts, medical powers of attorney
If you keep financial records, passwords, family photos and videos on your computer, consider backing the information up to a secure cloud storage service, or back up your data regularly and keep the backups somewhere safe.
AFTER THE DISASTER
Americans tend to come together in times of crisis. There will be a lot of people and organizations who will want to help you. And, unfortunately, there will be criminals who will want to exploit the trauma. Watch out for:
- Up-front fees to help you claim services, benefits, or get loans. No government official or agency will ever ask you for money to claim a benefit or service.
- Contractors offering door-to-door repairs, especially if they offer deep discounts or require payment before you have a contract in writing.
- Insurance agents who try to sell you coverage after the fact.
- Organizations with names similar to government agencies or charitable organizations.
If you believe you may be targeted by these practices, contact your local or state law enforcement officials, or submit a complaint to the CFPB online or at (855) 411-2372. See our rebuilding your finances checklist and other information on protecting and rebuilding your finances after a disaster. To find more information and answers to all kinds of commonly asked questions about consumer financial protection issues, Ask CFPB.
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