Are You Financially Prepared for an Emergency?

Being ready for a disaster is more than storing water and supplies.  You also need to be financially ready.  Starting early and having adequate insurance, a plan to pay your bills and access to your important records and accounts will help you get back on your feet faster and avoid problems with your credit when you need it most.

Hikingware.com asks these pertinent questions:

How much cash do you keep in your home?

How much cash should you keep in your home?

Have you backed up all your important financial records and information, so if they're physically lost during a disaster they will still be on file and accessible?

Do you have a will?

Are all your insurance premiums paid up?

The Emergency Financial First Aid Kit (EFFAK), a joint publication from Operation Hope and the FEMA Citizen Corps, can help you prepare now. Use the EFFAK to identify your important documents, medical records, and household contracts. When completing the kit, be sure to include pictures or a video of your home and your belongings and keep all of your documents in a safe space.

In addition to using the EFFAK, these other steps can help you safeguard your assets and recover quicker from an emergency or a disaster:

1. Download phone applications that can help during emergencies: Use the FEMA phone application to access to disaster preparedness, response and recovery resources including disaster assistance.
2. Enroll in Go Direct to minimize disruptions to receiving any federal benefits you are now getting or may be eligible to receive.
3. Plan ahead of time to recover: The USDA has created great resources to help getyou started, including Recovery After Disaster: The Family Financial Toolkit and the Disaster Recovery Log.

As to the question of how much cash you should keep on hand for emergencies, the best answer is simply to use common sense and extreme caution.

First and foremost, of course, is that you should never let anyone outside of your spouse, your adult children, and perhaps a very, very trusted friend, know that you keep ANY money in your home. To do otherwise is simply to invite home invasion and robbery.

Next, figure out the absolute minimum amount of cash you'd need to buy necessities and take care of repairs if you could not access your bank account or get to an ATM for six months. That is the amount experts like Suze Orman suggest you should keep on hand.

If you're able to invest in a good wall safe, do so. Otherwise, U.S. News & World Report suggests these four hidey holes for your money:

1. Inside false infrastructure. Constructing fake fixtures around the house, like a drain pipe in the basement, return air vent in the living room or power outlet on a bedroom wall, gives the appearance of working household parts, but in fact, acts as a facade for hiding your emergency money inside.

2. Buried outside. What better way to hide money inside your house than hiding it outside? Pick a reasonably conspicuous spot in your yard or garden to bury your money, and carefully protected, nobody will find it – except you, as long as you remember where you dug. Zip cash up in bags, put it in glass jars and/or wrap the bills in plastic or a small tarp.

3. Disguised and dispersed. Sometimes, hiding your money in less conspicuous places can be the most inconspicuous hiding spot that a thief might overlook. Are you a devout bibliophile? Hollowing out a book to stuff some bills into is an outdated method, but not for anyone with an extensive library of tomes floor to ceiling, where the "money book" is hidden among hundreds of other books and more difficult to find. What about hiding some cash in an envelope in a box of blank envelopes? Don't stash your cash in the freezer; it can develop frostburn and actually decompose when thawed out!