Japan's earthquake and tsunami should be a loud and clear wake-up call for those unprepared for a natural disaster. Whether it's an earthquake, tornado, fire, hurricane, flood, or terrorist act, history shows that no one is immune to being part of some sort of disastrous event. Knowing and applying disaster preparedness information can be lifesaving during a disaster. However, it doesn't end with just protecting your person. Part of being prepared for a disaster is also learning how to protect your financial assets.

It's often helpful to visualize yourself in a few different worst-case scenarios to determine what information and items you'd need to protect your financial assets in the aftermath. What would you do if warned that your home would be destroyed by a tornado in a few minutes? What would you do if your home remained intact after a hurricane, but left you without electricity, phone service, and/or transportation?

Most disaster preparedness plans recommend people have an emergency bag ready to go with water, first aid, medicines, flashlights, and other items to protect your physical well-being after a disaster. However, you also need to remember to include items that will protect your financial assets. A lot of these items can be placed in the bag beforehand. Other day-to-day items will need to be packed separately:

  1. Put enough cash inside your emergency bag to last your entire family at least three days. Don't dip into it until a disaster occurs and don't make the mistake of counting on an ATM or bank for cash, as neither may be operational if the power is out or the roads are impassable.

  2. Insurance cards, drivers licenses, passports and credit cards will most likely be needed too often to go into the bag. Make sure to keep these items together, such as in your wallet or purse, and to store them in an easily accessible location.

  3. Keep copies of power of attorney and medical directives for family members in your emergency bag.

  4. Even though service outages are common during disasters, you'll want to carry your cell phone, iPad, and/or smart phone with you, as well as their chargers. Place them in an easily accessible area and make sure that you always charge them nightly. Just in case you have service, but no electricity, you might also want to consider placing a solar power or hand-crank battery charger in your emergency bag.

  5. Store the contact info and account numbers for all your insurance policies on one of the electronic devices you plan to carry with you. However, since you might not have power or service following a disaster, you should also have a handwritten list in your emergency bag. All regular bill obligations should be listed the same way. Although many companies will overlook late payments during a disaster, they aren't obligated to offer any forgiveness. Therefore, you should at least be prepared to pay your bills as scheduled. Do the same for your bank accounts, retirement accounts, and financial investments, but be sure to guard this info more vigilantly. You certainly don't want such info to fall into unscrupulous hands. Protect the electronically stored list with a password. On the handwritten list, you might scramble the account numbers and/or passwords.

  6. You'll want to let your employer know that you're safe and determine when you need to report to work. Ask your employer if there's an emergency preparedness program and how/who to contact in the event of a disaster.

  7. You want to quickly grab any safe deposit box, home safe, and post office box keys and go.
In addition to having your emergency bag and grab and go items ready, you might also consider the following actions:

  • Store important financial documents, such as insurance policies, deeds, and wills, in a safe deposit box or in a water and fire-proof home safe.

  • Consider what will happen with your income during and after a disaster. Those living off an annuity, government benefit, or pension probably won't run into any problems with their income flow. However, self-employed and hourly workers could find themselves reliant on their emergency cash fund or credit cards for days, weeks, or even months after a disaster.

  • Keep some emergency funds available on your credit cards, especially if you don't have a cash emergency fund.

  • Review your insurance policies to make sure that you're covered sufficiently for applicable disasters.

  • Make it a habit to never park your vehicle with less than a quarter tank of gas. It could be days after the disaster before you can obtain gas; a full tank goes a lot further than an empty tank.

Don't wait until you see a news broadcast that a disaster is headed for you to get prepared. Remember, many disasters happen with little, if any, warning. Being prepared to protect yourself and your finances shouldn't be a hard-learned lesson.
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