- The Wisdom Journal - http://www.thewisdomjournal.com/Blog -
5 Ways To Disaster Proof Your Finances
Posted By Ron On March 17, 2010 @ 6:15 AM In Goals,Life 101,Personal Finance | Comments Disabled
 Earthquakes, floods, and forest fires know no season. Spring tornado season is just around the corner and soon thereafter, we enter hurricane season. If you were thrown a curveball and had go through a hurricane, tornado, earthquake, flash flood or forest fire – would you be financially prepared to weather the storm?
Natural disasters serve as reminders that we all need to be prepared, no matter the source of the disaster. What to do?
Go room by room and record a visual inventory of your possessions on a video camera or still camera. Describe the item in your own voice, recording its cost and when you bought it as well as any serial numbers or model numbers. Photograph your landscaping, patio, outdoor furniture, fencing, and sprinkler system and include automobiles, boats, or RVs. Review your inventory every two to three years to keep it up-to-date and augment the video or photographs with a written record. List each item and its value as well as any identifying numbers where appropriate. Put your inventory records in a safe place such as a safe-deposit box.
Scan your financial documents (mortgages, life insurance  policies, other insurance policies, copies of your drivers license, passport, credit cards , everything) and burn them onto a CD in pdf format, then keep this CD in a safe deposit box. An alternative strategy is to use something like Mozy Online Backup  which offers up to 2 GB of free storage or unlimited storage for only $4.95/month. All you have to do then is remember to scan and save to your hard drive.
It may seem obvious to you and me, but believe it or not, most people are either not insured at all or severely under-insured on their homeowners insurance. According to the Federal Emergency Management Agency , only 25 percent of the 10 million American homes that lie within high flood-risk zones carry flood insurance, despite the fact that homes are four times more likely to be damaged by flood than by fire.
Your first line of defense is your homeowners insurance  so make sure you’ve examined your insurance coverage before disaster strikes. What you don’t know CAN hurt you in the long run. For example, there’s a big difference between replacement and reimbursement cost. If your 3-year-old flat screen television is destroyed in a flood, does your coverage pay to replace it or only pay you based on it’s current, depreciated value (much less)? Some policies only cover the structure so make certain you cover the contents of your home, as well as the structure. If you’re a renter, buy renter’s insurance because the landlord’s insurance won’t cover damage to your possessions.
If you find yourself going through a disaster, having a three to six month emergency fund  will be a lifesaver. Don’t delay in starting your fund as soon as possible. Use my Sneaky Savings Strategies to help you pump cash into your fund and don’t be afraid to get creative in your own savings ideas.
We all hope we never have to weather such a storm, but by taking a few smart precautions, a punch in the face by Mother Nature won’t knock you out.
Note: This article was included in the Carnival of Personal Finance – Blogthority.com Relaunch Edition! Make More Money Blogging edition! Thanks Mike!
Photo by smiteme 
Article printed from The Wisdom Journal: http://www.thewisdomjournal.com/Blog
URL to article: http://www.thewisdomjournal.com/Blog/5-ways-to-disaster-proof-your-finances/
URLs in this post:
 Tweet: https://twitter.com/share
 Image: http://www.thewisdomjournal.com/Blog/wp-content/uploads/2010/03/tornado2.jpg
 life insurance: http://www.thewisdomjournal.com/Blog/insurance/#life-insurance
 credit cards: http://www.thewisdomjournal.com/Blog/credit-card-information/
 Mozy Online Backup: http://www.dpbolvw.net/click-2864384-10430550
 Image: http://www.shareasale.com/r.cfm?b=369759&u=290897&m=29822&urllink=&afftrack=
 Federal Emergency Management Agency: http://www.fema.gov/
 homeowners insurance: http://www.thewisdomjournal.com/Blog/insurance/#homeowners-insurance
 emergency fund: http://www.thewisdomjournal.com/Blog/emergency-fund/
 disaster: http://technorati.com/tags/disaster
 tornado: http://technorati.com/tags/tornado
 disaster preparedness: http://technorati.com/tags/disaster+preparedness
 finances: http://technorati.com/tags/finances
 finance: http://technorati.com/tags/finance
 hurricane: http://technorati.com/tags/hurricane
 flood: http://technorati.com/tags/flood
 fire: http://technorati.com/tags/fire
 house fire: http://technorati.com/tags/house+fire
 financial preparedness: http://technorati.com/tags/financial+preparedness
 financially ready: http://technorati.com/tags/financially+ready
 emergency fund: http://technorati.com/tags/emergency+fund
 smiteme: http://www.flickr.com/photos/smiteme/
 The Wisdom Journal: http://www.thewisdomjournal.com/Blog/
 subscribe today: http://www.thewisdomjournal.com/Blog/welcome.php/
 Twitter: http://www.twitter.com/wisdomjournal/
 Facebook: http://www.facebook.com/pages/The-Wisdom-Journal/147054648679421
 »crosslinked«: #
Copyright © 2008 The Wisdom Journal. Some rights reserved.