Being ready for disaster
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It can be really easy to fall into a financial disaster after facing another crisis or disaster in your life. Whether it is a major disaster like a hurricane or a personal disaster like a fire, you often are forced to make a number of important decisions immediately following the event. You have to overcome your shock and make good decisions or you will face financial ruin. Here are five tips to get your finances in order before a disaster strikes so that you are ready for it and you can avoid financial disaster.
1. Automate. When something like this happens to you, you will be in shock. You will be unable to handle the simplest of tasks. That's why it makes sense to simplify your finances so that they will be taken care of even when you can't take care of them yourself. Have your paycheck deposited directly into your bank account. Have your bills paid automatically out of your bank account. Bank online. If your finances are taken care of automatically, you can't get yourself into trouble and things can go along fine without your attention until you can deal with them again.
2. Get organized. When something big happens, you will need your important documents quickly, including your will, insurance policies, deeds and banking information. If you are like most people, these documents aren't in one place. You might not even know where they are. Take the time now to make up a file folder with everything in it. Put them in a safety deposit box or give them to a lawyer for safe keeping. Tell your family members where they are.
3. Slow down. The impulse after a disaster is to try to solve all the problems you face at once. That may not be the best scenario, because you may not make the best decisions right then. If you can, take a few months before making any major moves. That will stop you from making decisions that you will later regret.
4. Who do you trust? There are some despicable people out there who will be looking to take advantage of you when you are most vulnerable. Don't fall for it. By building good relationships now with an attorney, accountant and insurance agent now, you will be far less vulnerable when something happens because you will already have someone you can trust.
5. Insure yourself. Make sure that you have the insurance you need in place now, so that it is in place when you really need it. Look at your homeowners policy, along you're your life, medical and disability insurance. Talk to a trusted professional to see what else you need and the best way to afford it.
Posted by jonathan on December 26, 2005 at 06:30 PM