No one likes to think about what it would feel like to lose everything to a catastrophe or natural disaster. Although it may seem easier avoid all the “what ifs” and just hope that disaster won’t strike anytime soon, preparing for the worst right now could save your finances in the future.
Take Danielle McNeely for example. About 3 months ago,she came home after a night of dancing to find her whole apartment building on fire. After the fire was put out, Danielle was allowed to enter her apartment once, and only once, to grab what was salvageable. What she didn't know that in addition to the fire damage, the smoke and water damage ruined everything. She was only able to grab a perfume bottle and a plate.
"While I did have renter's insurance, it was the basic coverage required by the apartment complex. I had never inventoried my things. I did receive the full benefit my policy allowed, but it was not but a fraction of the value of everything I lost."
Here are some things that you can do to protect yourself from the powerful forces of mother nature and financial devastation:
Be Adequately Insured
Although auditing your home inventory and insurance needs may sound boring, but if your home is destroyed and you are left with nothingbut the clothes on your back, you'll be thanking your lucky stars you did.
According to Susan Evans of WhatHappensNow.com, the number one regret of those who lost their home to a disaster have is not having created a home inventory. It’s obvious that nothing can replace the sentimental value of your home inventory, but at least you can cover your monetary loss.
Tips To Consider
- · You can not be adequately insured unless you are adequately inventoried! Inventory your home each year.
- · Many insurance companies can provide you with a checklist for documenting the content of your home inventory, like this one from State Farm Insurance. Get one each year!
- · Ask about riders. Riders are inexpensive and essential when it comes to covering all your bases. Homeowners are often drastically uninsured without them! Here is a list of some common policy limits, courtesy of WhatHappensNow.com:
o Business personal property - $2500
o Computer equipment and electronics - $1000
o Firearms- $2000
o Jewelry, furs, fine arts - $1000-$1500
o Money (including coin collections) - $250
o Silverware- $2500
- · Prepare for the truly unexpected. Sometimes it may not be a natural disaster that destroys your property. True story - I know of two people that have accidentally crashed their vehicles into homes!
- · Pay attention to the Natural Disaster Coverage for your geographical location i.e. earthquakes, flooding, and wind damage
- · Use iTaggit.com to find the current value of each item in your home inventory. As an iTaggit member, it's quick and simple to create your home inventory list online, where it is safe and available to you 24-7.
Create an Emergency Fund
I’m sure your mother has told you a time or two to “be sure and save some money for a rainy day!” We all know mother knows best and that certainly rings true with this piece of advice. Every financial planner will tell you how important it is to create an account specifically for saving money in the event of a financial disaster. If you haven’t started one yet, there is no time like the present. Do it today!
- · Start by saving 10% of your net income for 3 to6 months. This may seem like a large amount but trust me, adjusting your lifestyle to live on the remaining income now will save you in the future
- · An easy way to save without thinking about it is to have a set sum automatically deducted every month from your checking account and deposited into your savings account. This way, you will be saving and not have to give it a second thought!
Keep Your Credit Card Balances in Check
Credit cards sure are great, aren’t they? They are just like a big I.O.U. It’s really important to keep your credit card balances down and debt low in case you really need them as a primary source of cash. Credit cards can come in handy when you need to rent a hotel room or a car in the event of a disaster. Keeping your balance down will ensure that you don’t create a giant hole that you can’t crawl out of when the dust settles.
- · If you already have credit card debt, concentrate on paying it off now rather than later
- · Once you have worked to relieve a good chunk of your debt, try and put that card away for a little while as not to run up a large balance again
Plan for the Inevitable
Thinking about what will happen to your things after you are gone can sometimes be a scary and morbid thought. I hate to break it toyou, but eventually we are all going to kick the bucket. And last time I checked, we can’t bring anything with us to the other side. Now isthe time to plan the transfer of our assets so that our loved ones won’t have to worry about it after we are gone.
- · Create a your will now and don’t forget to update it after major life changes such as marriage, divorce, and the birth of a child or children
- · Valuing and cataloguing your home inventory online with iTaggit can make it easier to write your will and provide valuable information about your things for those who inherit them
Protect Important Documents
Certain disasters can cause you to leave your home in a hurry. Remembering to bring along your financial documents may not be at the top of your priority list in the even of say, a fire. This is why it is important to keep your things somewhere where they can never be destroyed.
- · iTaggit makes it easy to scan and safely store information about items and documents such as:receipts, appraisals, videos, item images, and other important papers online where they safe from damage
- · iTaggit is a trusted, secure resource. Everything on the site is protected by industry-standard, secure tools, including firewalls, virus scanning, and authentication services
Click here to being valuing and protecting your items with iTaggit today.
