Fires burning up and down the Colorado front range have forced many out of their homes, leaving some without a home to return to, while storms up and down the East Coast have homeowners cleaning up downed trees, smashed cars and homes and other storm-related damage.
June illustrated that many of us live only moments away from potential disaster and how we should do as much as we’re able to be prepared for a future emergency. There’s no doubt that these emergencies on both sides of the country has taken its toll on evacuee and storm survivors finances.
We, at GreenPath, offer our thoughts and prayers to all those affected by the recent natural disasters. For those who haven’t been directly affected, this is a teachable moment, showing how important it is to be prepared for an emergency.
Here are some tips for review:
• Set aside an emergency fund of three-to-six months of expenses so that emergencies of many sorts can be weathered.
• Having an available credit line on a credit card for emergency use can give you peace of mind. But make sure you have a plan to pay off the debt.
• Keep important papers in a lock box or other place so you can quickly grab them if you need to.
• Offsite or “cloud” storage systems can be used to store important information you could need in an emergency.
Here are some guidelines for handling your finances in an emergency:
• List all your payments and compile addresses, account numbers and contact information for all your creditors and those who you receive a bill from.
• If possible, continue to pay monthly bills and avoid late payments. Ask the creditor to waive a late fee, should you receive one. Consider setting up online bill-paying options if you have Internet access.
• Don’t assume your creditor knows your circumstances. Update your creditors on your situation and provide updated contact information.
• If you’re unable to pay a debt you owe, immediately see if your creditor can defer payments under a hardship clause. Most can do so for a month or two under emergency circumstances.
• Make sure you know all aspects of your insurance policy.
• Save receipts for all purchases. Your insurance may cover some expenses if you keep good records, and you may be able to qualify for disaster relief when it’s time to file your taxes.
• Limit credit card use only to essential items so your debt doesn’t increase more than necessary. Those low on savings should keep costs as low as possible and take advantage of free community services.
• Avoid drawing out of retirement accounts, as penalties may be assessed. If you must, first check if you have a Roth IRA to tap into, as taxes have already been paid on such investments.
GreenPath Debt Solutions is a U.S. Department of Housing and Urban Development-approved housing counseling agency, available to help you make decisions regarding your housing needs and goals. In addition, GreenPath counselors are available if you have questions or are experiencing financial difficulties, regardless of circumstances.