As the new year starts, many people are thinking about their New Year’s resolutions. Many people resolve to get in better physical shape, but what about getting in better financial shape? Getting in financial shape for emergencies is an easy goal for anyone to set this year! According to FEMA’s 2018 National Household Survey, almost seven out of ten people have set aside some money for an emergency, although most have set aside less than $500. In the new year, why not start saving or increase your emergency fund by an amount that makes sense for you?
Emergencies aren’t just hazards and disasters. They can be any unexpected expense that includes your car, house, other personal property, or a decrease in income due to job loss. The FEMA Financial Preparedness Fact Sheet identifies ways to get started on being prepared before, during, and after a disaster takes place. These tips include:
- Keep cash on hand in a secure location;
- Record your property (video or photos);
- Understand how to reach out for disaster assistance; and
- Understand how to file insurance claims.
Another way to get started is to use the Emergency Finance First Aid Kit (EFFAK) as a guide. The EFFAK is a free resource with low- to no-cost activities to improve preparedness, such as:
- Identifying and compiling important financial, legal, and medical documents;
- Creating a contacts list in case of an emergency; and
- Understanding how to store and secure this information.
While planning and preparing for unexpected expenses are great ways to improve your financial wellness, they aren’t the only ways. Other ways you can improve your financial wellness in 2020 include:
- Checking your current financial fitness;
- Opening a savings account and putting in small amounts of money on a regular basis;
- Contacting a qualified financial counselor or coach for personalized help reaching financial goals;
- Reviewing your credit report on each of the three major consumer reporting companies to check for errors; and
- Reassessing your current insurance policies and making sure they cover your needs.
The start of a new year is a great time to take stock of your financial preparedness. For more information, please visit www.ready.gov/financial-preparedness to learn more about ways to be financially prepared.
This article first appeared in the monthly Individual and Community Preparedness Newsletter. Subscribe here.