Security Whip

When we hear people speak of being financially secure, we tend to think of wealthy individuals with a large portfolio in the stock market. But what happens when something goes wrong? Personally, when I think of financially security I think of someone who has positioned him or her self to withstand a financial disaster and is able to come out of it relatively unscathed. Financial problems have many faces and can occur in many different forms, job loss, natural disasters, illness, divorce, etc.

In the last few years we have witnessed some devastating natural disasters in this country, 75 major disaster declarations to be exact. How long could your family survive on one salary or worse yet, no salary?

A study conducted by Harvard in 2001 found that illness and the associated bills caused half of all bankruptcy. Interestingly, three quarters of these people had medical insurance. We can extrapolate a few things from this data just by making a few assumptions. One, the insurance wasn’t very good to begin with. Two, they were under insured or three, they just plain exhausted there insurance benefits. I’m no expert, but I would imagine that the high cost of medical care just became too much.

Questions that everyone might want to ask themselves, what can I be doing right now to ensure that my family and myself are prepared during a time of crisis? A good place to begin would be a self-audit to ensure you are prepared for whatever life can throw at you! Below is a list that might help you get started, I’m sure you can add more.

Plan – Write down ahead of time what you will do in a time of emergency. Where will the money to live come from until you are back on your feet.

Savings – Having three to six months of salary in a high interest bearing account.

Emergency Money – In times of natural disasters cash is king and the electricity isn’t always working, ATM’s  are useless. Have some money on hand, preferably in low denomination bills and coins.

Debt – Start reducing your debt. In a time of emergency it’s great not to have to worry about paying off car loans and credit cards. Make it a priority! The web is full of great ways to start reducing your debt.

Insurance – In times of emergency insurance can make you or break you. How many times have we heard horror stories from people who lost everything due to not being insured? Make sure you have the right kind and the right amount to include:

Health insurance

Homeowners and renters insurance

Auto

Life

Disability

Flood

Will – For some reason people are scared to death (sorry of the pun) to talk about wills. This one document can save your loved ones additional stress and heartache in the event of a death. Plus, it ensures that your assets go where you wanted them to go. Do you have one? Is it up to date? Don’t forget about a living will too!

Important papers – Are your important records organized and in a safe place in the event of a fire or flood? Consider a safety deposit box or a fireproof lock box.

Important numbers – Have all your important accounts numbers and phone numbers in a spreadsheet or something similar. Keep it in a safe place. It might be a good idea to have both a hard copy and a soft copy, possibly on a thumb drive.

Backups – When is the last time you conducted a backup of all of your important information on your computer. If you haven’t, you should consider making this a priority. Automatic backups are the best! Don’t forget about encryption.

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