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Friday, April 12, 2013

Life’s Financial Emergencies: What You Can Do to Prepare

When it comes to personal finances, it is common to plan for anticipated expenses such as college, a wedding or retirement. However, one of the most important things we should all plan for is the unexpected. No one likes to think about a hurricane, flood or other disaster hitting their community, and although you cannot prevent them from happening, you can prepare for them. A good way to plan is by creating a Life’s Emergency Kit. Follow the steps in this PREPARE plan from Capital One. 

* Protect yourself by insuring valuable items. 

We often underestimate the cost of replacing all of the items in our household. Take time to think about all of the items you would need to replace in your home and make a list: kitchen appliances, furniture, home electronics, clothing, mattresses and linens are some of the things you will need to replace if your home is destroyed. 

* Revise and update your information. 

This includes everything from credit card account numbers and insurance policies to contact information for lenders and insurers. Update your household inventory lists for insurance claims regularly and be sure to note the item, when you bought it and how much you paid for it. If possible, include a copy of the receipt of sale for the item. This will make it easier to report your losses to your insurance company. Whenever possible, take photos of the items on your inventory list and keep them in a safe deposit box. You should also keep a set of negatives in your Life’s Emergency Kit. 

* Establish an emergency fund. Set aside money each month for emergencies. 

From an untimely illness to sudden unemployment, an interruption in your normal cash flow can create a very stressful situation. You can help alleviate some of the strain by setting aside money each month to build a cash reserve. Know your credit card’s limits and keep your balance manageable, as you may need to draw on this credit in case of a long period without access to cash. 

* Prepare a will. 

It is not an easy thing to think about, but by writing your will you can ensure your finances are in order in the event of your death and be assured your wishes for your estate will be carried out. Be sure to keep a copy of your will in your Life’s Emergency Kit, but keep the original with your lawyer. 

* Allow accessibility. 

Share your financial information with your spouse, a trusted family member or friend to ensure your finances can be accessed and handled in the event you are unable to manage them yourself. 

* Rent a safe deposit box. 

Items that you should store in a safe deposit box include copies of wills and powers of attorney (originals should be kept with your lawyer); deeds and titles to autos, RVs or boats; birth certificates and naturalization records; marriage license; legal documents including divorce papers and child custody papers. Also include certificates of stocks and bonds, trust agreements and copies of all insurance policies. 

* Equip yourself with an evacuation kit. 

Prepare a waterproof document pouch containing all the documents you will need to restore your financial records and begin the process of recovery. In addition to all of the financial and personal paperwork be sure to include a copy of your safe deposit box key, a calling card, diskette/CD with financial records, a calculator and pen. You should also keep a small amount of cash and travelers checks in the event you cannot access your bank accounts. 

Check with your local weather service or visit the American Red Cross at more information on natural disasters that may affect your local area. 

In order to help support the American Red Cross in its ongoing disaster relief efforts, providing shelter, food, counselling and other assistance to those in need, Capital One has introduced the Capital One American Red Cross MasterCard. Capital One will contribute one-half percent of all purchases and balance transfers made to the customer’s local American Red Cross chapter. For more information, visit

Courtesy of ARA Content


  1. Thanks for this information. It helps me a lot especially now that I already have my own family :) Protecting them is one of my biggest responsibility. Be PREPARED always :) thanks

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