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Military Finances 101: 6 Homeowner Tips to Prepare for Natural Disasters

Managing Your Finances

The peak of Hurricane season is about to arrive and plenty military bases are in areas where hurricanes are a threat. But you can't relax if hurricanes aren't a threat either. Flooding, tornadoes,  wildfire - it feels like a week doesn’t go by without one of these natural disasters popping up in the news. Every part of the country is faced with its own environmental threats. But the truth is, many Americans struggle to keep emergency funds on hand. According to a recent survey, only 40 percent of Americans would be able to pay for an unexpected $1,000 bill with their savings. The rest would be left racking up credit card debt, borrowing from friends and family or taking out a personal loan.1 Military families may face even more stress as the mission won't necessarily stop just because of a natural disaster. And if the Military Member is deployed to a combat zone, the challenges presented by the natural disaster are only multiplies

Tip #1: Fill Up Your Emergency Fund

First things first: if you don’t have a dedicated emergency fund, it’s time to start one. And if you’ve been slowly draining your fund for non-emergency spending, focus on filling it back up. While your insurance may cover the damage done by whatever disaster has just occurred, it could be a little while until you see any money coming your way. In the meantime, you could be stuck paying for nights in a hotel, meals for your family, gas, medical bills and other expenses. The need for an emergency fund to cover expenses in the event of unemployment isn't as high for a military member as for a civilian. With that said, you need to be ready to pay for expenses that your insurance won't pay for and for your deductibles...minimum.

Tip #2: Prepare For Unexpected Expenses

Speaking of keeping your emergency fund full, a natural disaster can incur unexpected, and often costly, extra expenses. If a hurricane is nearing the coast, it’s not out of the question to see hotels inland raise their prices. The same goes for gas, food and water. With the rise of demand can come a surge in pricing. While expenses resulting from a mandatory evacuation might be covered, there is no guarantee that expenses incurred while evacuating without a mandate are less likely to be covered.

Tip #3: Keep Cash On Hand

It’s generally a good idea to keep a stash of cash on hand, but it’s especially important if you’re preparing for the possibility of a natural disaster. Whether you’re facing a blizzard, hurricane or tornado, your town or city could easily go days or weeks without power. That means merchants in your area may be without power as well, which could make them cash-only businesses for the time being. If the power is out, ATMs probably won't work either. Keeping some cash on hand (smaller bills are usually preferred) could allow you to still purchase essentials including food, water and shelter.

Tip #4: Assess Your Insurance Policies

If we asked you to list off exactly what is covered by your insurance policies, could you? If you’re like most, probably not. But trying to make a claim with your insurance company days after a natural disaster has occurred is not the time to learn that your property wasn’t covered. Instead, take the time well-before a natural disaster strikes to discuss with your partner and your insurance provider what your homeowners or other insurance policy protects. Together, you can discuss any additional coverage or changes that could help keep you and your belongings protected in the future.

Tip #5: Always Keep Records Of What You Own

Once you’re sure your insurance policy has you covered, you need to be ready to make a claim at any time. That means keeping accurate records of what you own, what you paid and how much it’s worth. Keep a spreadsheet, photos or video of your current valuables as well as their cost price and current value. This can help to keep the claims process moving when it comes to getting reimbursed for your lost possessions. Try to save digital copies outside of your house in the event your home or files are destroyed due to the natural disaster. This could include keeping digital records in the cloud or physical copies in a safety deposit box or stored at a relative’s house.

Tip #6: Set Up Autopay

We’ve already discussed the extra expenses you may want to prepare for when recovering from a natural disaster. But one extra expense you shouldn’t have to worry about? Late fees. Setting up autopay on your credit card, car payment, cable bill, mortgage or other ongoing expense is one way to avoid missed payments in the wake of a natural disaster. Because the last thing on your mind when a natural disaster strikes is paying the cable bill, and understandably so. Autopay can make life easier any day of the week, but it can also mean one less thing on your plate after a disaster occurs and your world gets a bit more chaotic. And like we always like to remind military members, your credit score can affects your ability to get and keep a security clearance.

No matter where you live, you just never know when disaster may strike. And as you’re left with the emotional turmoil of putting the pieces of your life back together, it’s important to know that you’re financially well-grounded. Use these six tips above well before a natural disaster occurs to help keep you and your family financially prepared for the unexpected.

1 https://www.bankrate.com/banking/savings/financial-security-january-2019/

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