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Understand what you need to do to ensure financial preparedness for yourself and/or your family if you home or business is destroyed or inaccessible.
>> Protect your cash flow
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Stash a sufficient amount of cash, traveler’s checks and a roll of quarters (for pay phones) in your disaster supply kit.(estimate what your family might need for three days).
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Plan toward saving enough money to pay all your bills for three to six months – keep in a separate account.
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Simple saving ideas – place $1 plus loose change in a jar each day – deposit into a savings count; pack your lunch; put half of your tax refund, bonus or extra cash in your emergency fund.
>> Understand how a disaster may affect your job – what can you expect from your employer?
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What is your company’s disaster plan?
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If I can’t to get to work after a disaster, will I still be paid?
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Would you be eligible to collect unemployment comp?
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If you’re injured at work during a disaster, would you qualify.
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Explore tapping into your retirement plan, whole life or universal life insurance policy for an emergency loan. Consider a reverse mortgage or sell personal property to raise cash.
>> Buying insurance – what to look for in a homeowners’ or renters policy?
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Make sure you understand what the policy will and will not cover and what the deductible is.
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If you are a renter, consider purchasing renters’ insurance to cover liability and possessions.
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Explore earthquake, flood, umbrella liability insurance and/or additional riders to cover expensive items (ie: jewelry, home office equipment)
>> Managing Debt
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Get debt under control as much as possible
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Call the businesses to which you owe money for help in working out a manageable plan.
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Pay off credit card debts with highest interest rate first.
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Make sure your disaster supply kit contains information about your loans and credit cards, including account numbers and contact.
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Consider bankruptcy only as last resort.
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