How to Be Financially Prepared for the Unexpected

As cleanup continues in the wake of hurricanes Harvey, Irma and Maria, as well as the wildfires in California, the importance of disaster preparedness has become quite clear. And, similar to stocking up on necessities like water, canned goods and batteries, getting your finances in order before a potentially catastrophic event is part of an effective overall disaster plan. Financial preparation is critical to maintaining as much regularity as possible, and to resuming daily life more quickly and smoothly.

Here are a few important ideas to consider when preparing for a disaster.

Establish an emergency fund. It’s wise to assume that ATMs won’t be functional or will be depleted quickly following any disaster. Keeping a small amount of cash — such as a one-month supply — in a safe place ensures that you can afford the food, water and emergency supplies necessary for survival after a significant event.

Make sure important documents are accurate and up-to-date. Meet with your financial advisor and other professionals to verify that all your documents are filled out correctly and align with your long-term plan. Such documents include health, life and property insurance policies; credit card, investment and bank account information; auto registration and title papers; birth certificates and adoption papers; marriage license; Social Security cards; and real estate deeds. Before a disaster strikes, gather all these records and secure them in water- and fireproof containers, if possible. Also, make note of all relevant account numbers and claims contact information in case you need to start filing claims immediately after a storm.

Use technology. It may be useful to make an electronic copy of each important document and save them in the “cloud.” Also, electronic access to your financial accounts enables you to pay bills, transfer funds and monitor your account online. Know your login and password information to all accounts. If you wait to electronically pay your bills close to the due date, a power outage could prevent you from doing so or being able to access your accounts. Avoid late fees by scheduling payments online as soon as you receive your next bill. You can often choose the payment date so you are able to control the timing of the payment.

Evaluate your insurance. Thoroughly review your insurance policies to make sure you have the appropriate amount of coverage. Be sure your home or renters, auto and life insurance are all current. Read the fine print of your policies. Some homeowners and renters policies, for example, do not cover water damage. Call your insurance agent to confirm and enhance your coverage, if needed. Consider storing receipts or pictures of your valuables with your important documents. Having documentation of your property can make the insurance reimbursement process much easier if a disaster strikes.

Have a family “meet up” plan. In case your family members become separated after a storm or fire, it is important to predetermine your locations — both electronic and physical — to reconnect. Add your family to Group Me or some other app so you can stay in contact with one another via text, and choose a physical location where you can meet after a disaster.

Ultimately, it’s difficult to imagine the extent of the economic repercussions a major natural disaster can bring about. Although there’s little that can be done to avoid Mother Nature’s next catastrophe, it is possible to prepare for it both physically and financially.

kristen-fricks-roman Kristen Fricks-Roman CFP®, CRPS®, is a financial advisor and senior vice president at Morgan Stanley Wealth Management, Atlanta. She can be reached at [email protected].


The information contained in this article is not a solicitation to purchase or sell investments. Any information presented is general in nature and not intended to provide individually tailored investment advice. The strategies and/or investments referenced may not be suitable for all investors as the appropriateness of a particular investment or strategy will depend on an investor’s individual circumstances and objectives. Investing involves risks and there is always the potential of losing money when you invest. The views expressed herein are those of the author and may not necessarily reflect the views of Morgan Stanley Wealth Management, or its affiliates. Morgan Stanley Smith Barney LLC and its Financial Advisors do not provide tax or legal advice. Individuals should seek advice based on their particular circumstances from an independent tax advisor. Morgan Stanley Smith Barney, LLC, member SIPC.

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