September is National Preparedness Month, your annual reminder to plan ahead for the emergencies and natural disasters that could strike at any moment. We stock bottled water and canned goods, make sure there are batteries in our flashlights and check our fire extinguishers. However at California Bank & Trust, we want to be sure that financial preparedness is also part of your plan when it comes to the unexpected.
Why financial preparedness matters
Whether it’s getting let go from your job or losing your home in a fire, being financially prepared means you have one less thing to worry about if facing these crises.
Floods, storms, fires, power outages, job losses, scam exploitations and cyber-attacks are all examples of emergencies that can leave you without a home, drained of your savings or in debt if you haven’t taken the needed precautions.
Being financially prepared will help reduce your stress and get you back on track faster so you can focus on other things.
Practical steps to build financial resilience
A strong line of defense against an unexpected disaster is building and managing an emergency fund. You should aim to put three to six months’ worth of essential expenses in it, including housing, food, utilities and gas. It’s recommended to keep this fund in a high-yield savings account, as these allow you to earn interest and your funds can be easily withdrawn.
Building financial resilience also means creating and organizing your important financial records. Store your physical files in a “grab-and-go” box, where they’re easy to grab when disaster strikes. Make digital copies of your files and store them in an encrypted cloud service like Google Drive, Dropbox or iCloud. This ensures you have backups if the originals get stolen or damaged during a natural disaster.
Tools, resources and next steps
Preparing for an emergency also means following certain procedures when using bank services, therefore lowering your vulnerability to scams. When using your bank’s mobile app, avoid signing in on public Wi-Fi, use strong passwords, turn on push notifications so you can quickly spot unauthorized charges and set up direct deposit, so your paycheck isn’t delayed.
Understanding your insurance policies is critical to preparing for an emergency. Check limits, review deductibles and know what exclusions come with your insurance plan. Also be sure to document your belongings through photos and receipts.
Review this checklist each National Preparedness Month to ensure you have your budget set and are ready for what may come:
- Build an emergency fund
- Take inventory of your finances and possessions
- Assemble a “grab-and-go” box
- Make digital copies of irreplaceable documents
- Follow best practices for accessing online banking tools securely
- Stay up to date on your insurance plans