Do you know when the next disaster will strike? Or what will that be? This is why being prepared could turn out to be lifesaving. Having a bag with your immediate needs already packed and stored is absolutely essential, and so is including money in your disaster survival pack. Here is a complete guide to disaster preparedness for your finances, in 7 easy steps!
Step 1: Think ahead!
Collect all financial documents and make certified copies. Keep them in your emergency bag, in a waterproof, and ideally fireproof, container. A sealed metal box will do just fine, there is no need for expensive gear. Include credit details, insurance contracts, the deeds to your house, car, or any other property you own, and a store of cash.
Step 2: Digital Banking and Budgeting
Store enough cash to allow you to live off it for at least a month. This amount should include living expenses and food. Here are some things you could include in your saving process in order to be financially prepared for what is about to come:
- Be frugal when budgeting, but not cheap;
- Keep track of your finances;
- Exclude non-essential payments, such as presents, movies, and other outings.
In all honesty, for many of us, keeping track of expenses can be a bit of a hassle. This is totally understandable. It happens that even when we really give it our best to put some money aside, we don’t seem to come up with the right sum by the end of the month.
Luckily, digital tools like Qube Money can take care of everything. Literally everything. It will help you conveniently increase financial awareness while keeping track of how much you spend, what you tend to spend the most money on, and how your spending behavior changes over time. If you are more inclined to keeping track of your life digitally, using an app like Qube Money could turn out to be the quickest way to save up some emergency money. What is particularly really great about this one, is the fact that you get a very intuitive interface that is highly user friendly and holds the potential to turn your savings journey into an actually pleasant experience towards being financially prepared. There is also budget training for those who need it.
Remember – more is always better when it comes to disaster preparedness.
Step 3: Store non-perishable foods
The same advice applies to general disaster preparedness as well, but keep in mind that when resources are low, prices rise. So, get ready and buy easily stored foods with a distant expiration date. This strategy will ensure that if and when disaster does strike, you will not be left buying overpriced leftovers. Buy in bulk for even more efficient budgeting!
Step 4: Restrain yourself!
Resist the temptation to dive into the emergency store of cash. Ideally, once completed, that fund should be accessed once a year, when you adjust it according to the latest expenses. Do not treat that money like it’s a piggy bank you can tap in and refill later. Once in the emergency bag, that money is untouchable. Think of it as non-existent!
Step 5: Start early
As soon as you have a stable income, start budgeting and saving. It might take you a while to save enough money to complete an emergency cash fund, so start as soon as you can! Regularly put aside small amounts, so you do not strain your daily finances. The goal is endurance, not speed, so do not go into debt to be “financially prepared”! When you expect a considerable change in your finances in the close future, such as the birth of a child, start saving money before the arrival.
Step 6: Be smart!
When it comes to money and budgeting, thinking on your feet and planning ahead will keep you afloat. Make sure that everyone in your household knows where the emergency kit is and what it contains. You should also make sure that they are aware of its use. Children old enough to be told about the disaster pack could benefit from examples of what counts as “emergency” as well.
Step 7: Have backups
Even if your disaster fund is complete, your work is not done yet. Similar to vital digital information, finances need backups too. Create a second financial preparedness box with all the paperwork and funds and store them somewhere else in the house. This is your hard copy backup. And just in case, add a little something in your savings account whenever you can and create a cloud backup!
Step 8: Secure your backup
In an ideal world, you’d create said backups and simply be done with them for good. Your backups also need to be “backed up” in a sense. For starters, if you have a physical backup, make sure to store it somewhere safe, preferably in a, you guessed it, safe. Doing so will prevent any potential fires from destroying said backup or thieves from stealing it. Even if thieves manage to steal the safe, they’ll still need to get through it, which is easier said than done.
What about the digital copy?
Ah, yes, the wonderful world of the internet filled with hackers, malware, and all sorts of other dangers that many users blindly ignore. If you’re backing up your financial data to the cloud, be sure to use an extra security layer such as 2-factor authentication or some form of encryption. But preferably you’ll use a combination of these two elements.
The same goes for data stored on physical hard disks. It’s not enough to just put the hard drive in a safe place and forget about it. If thieves get a hold of it, they’ll be able to copy all your precious info with ease. For this reason, we recommend you search for encryption software online or at the very least use your OS’s integrated encryption solution to make it almost impossible for hackers to access the information. Just don’t forget your master password!
Step 9: Relax!
You’ve done enough work and you deserve a pat on the back for that. Now that you’ve secured everything, you can rest easy. While nobody can predict when the next disaster will strike, you are now far safer than you were before. Life moves on and we need to enjoy it in our spare time, so stop worrying so much now that you’ve secured your finances. You’ll probably be just fine during the next disaster.
The Bottom Line
Finally, follow these 7 easy steps and you will be financially ready for any disaster. Remember, take it slowly, prioritize, think ahead, and do not hesitate to ask for help!