Portland, Ore. (KOIN) — September marks National Preparedness Month, the perfect time to see how financially prepared you are for the unexpected.
In the Portland Metro area, the risk of a natural disaster to people and property is “relatively high.” That’s according to the Federal Emergency Management Agency’s Risk Index. The greatest threats include earthquakes, extreme heat, flooding and wildfires.
To help you assess your readiness, OnPoint Community Credit Union has released a seven-step financial preparedness checklist.
The checklist includes:
Boosting your financial knowledge
Financial education pays off in times of crisis. But a seven-question financial literacy survey showed that most Oregonians were unable to answer more than three questions correctly.
Expand your financial knowledge by speaking with the team at your local bank or credit union. The staff can provide guidance, tools and resources to help with your journey toward financial preparedness, including:
- Creating and maintaining a budget by tracking income and expenses
- Establishing a savings plan
- Exploring investment options to grow money over time
Building an emergency fund
Nearly 25% of consumers lack an emergency fund. This can act as a safety net in case of unexpected expenses, job loss, or emergencies, helping you avoid falling into debt, etc. Establish a separate savings account and set aside three to six months’ worth of living expenses. Saving just $10 a week can prepare you for life’s emergencies.
Reviewing insurance coverage
Review your health, life, home, renters and auto insurance policies to gain a clear understanding of what is covered. For instance, policies may exclude flooding or earthquakes. Consider additional coverage if necessary. Or if you’ve recently remodeled, be sure to update your policy to reflect the new value of your home.
Taking a home inventory
This will help file you insurance claims more efficiently in the event of a fire, flood, or theft. Go room by room, document each item and list details like purchase date and price. Take photos or videos and attach receipts, especially for valuable items. Consider using an inventory app to create and store the list digitally.
Protecting important records
Keep copies of essential documents, such as identification, insurance policies, wills, and financial records, in a secure location like a safety deposit box or fireproof safe. Quick access to these documents allows you to handle financial matters more efficiently during a crisis.
Assembling an emergency kit
An emergency kit—or “go-bag”—helps keep essentials together in case you must evacuate quickly. But the cost of supplies can add up, so prioritize the more critical items, such as non-perishable food, water, first-aid items, flashlights and batteries. Purchase items from discount retailers or repurpose items you already have, like an old backpack.
You can also buy items in bulk to reduce the cost per unit, or gradually purchase items when they are on sale. Check out a suggested list of supplies here.
Creating and solidifying an estate plan
An estate plan ensures that decisions about assets, finances and healthcare are made according to your preferences. To create one, you should:
- Take an inventory of your assets. Include items such as your home and other real estate, vehicles, valuable collectibles, checking and savings accounts, life insurance policies and retirement plans.
- Put a last will and testament in place. Having a last will and testament ensures your beneficiaries receive the assets you want to leave them. You can name an executor who is responsible for paying your debts and distributing the remainder of your estate according to your wishes.
- Establish your directives. Set up a living will to help medical providers know if and when you want treatment. Consider putting your assets in a trust and designating a trustee, or a power of attorney who can manage your finances.
- Keep them up to date. Estate plans should be updated every three to five years, or after a significant life event.