Recent bank failures, worries about a recession, skyrocketing inflation, and rising interest rates have probably been on your mind if you’ve been watching the news lately. It is sufficient to persuade you that the end of the world is near! So, how can safeguarding your family help in a time of need financially? Let’s arrange our money affairs properly!
Establish An Emergency Fund
Having an emergency fund on hand is without a doubt one of the finest methods to safeguard you and your family in times of financial difficulty. Don’t get me wrong, it can be a bit intimidating to save up three to six months’ worth of living expenses. But believe me. When life throws you a curveball and you have that cushion to land on, you’ll be so appreciative.
I’m also aware that there is considerable disagreement on the size of and necessity of a 3–6-month emergency fund. But consider this. You must have a six-month emergency fund if you are even the slightest bit concerned about a recession.
Why? Because rising interest rates or inflation are not the most terrifying aspects of a recession. It’s a lost job. It’s a frigid job market more so than a lack of jobs. In an emergency, having a six-month emergency fund can mean the world to your family.
Related Post: How To Build an Emergency Savings Fund
Maintain A Food Stockpile
Even if this one doesn’t necessarily have to do with money, it’s still significant. You should keep a small supply of canned goods and bottled water on hand. If you can’t get to a grocery shop and you don’t have power or water during a natural disaster, this could save your life.
At least you can continue to have enough to live on. This is a crucial strategy to stretch your money even farther if difficult circumstances arise, such as the loss of a loved one or a job.
Keep your Data Somewhere Accessible and Secure
Would someone you trust (such as your husband, parents, kids, etc.) know how to access your information if something were to happen to you immediately away? Could your spouse access your investing portfolio without your assistance? If your house was damaged, would it be simple for you to make a claim with your homeowner’s insurance?
Having a secure location to store important documents is the best way to make sure you are prepared financially in an emergency. For my family, we store this data in a fireproof box and a copy in the cloud. All the hard copies of crucial information and our passports are kept in the fireproof box, which is simple to get to if we had to leave our house right away.
Electronic copies of these documents are kept in the cloud by us, and the only other person besides my family and I who knows how to access the cloud if something was to happen to us both.
Valuables for Secure Storage:
- IDs with photos, such as passports
- Payment in small bills
- a video tour of your house and its contents (having this as evidence will make filing insurance claims for your house and your apartment easier)
- a divorce decree or a marriage certificate
- Birth and death certificates that are originals only
- Social Security Cards (it’s crucial to have these on hand because you’ll need them to apply for FEMA assistance)
- Documents proving military service and, if applicable, dog tags
- Housing records (payment details, a deed, etc.)
- Financial records (location of your accounts, account numbers, passwords, and beneficiary information)
- Insurance policy paperwork
- Important health information for every member of your family
- Information about your pet’s identification (including, if applicable, any microchip information; be sure to keep this updated with the microchip’s manufacturer)
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Maintain Sufficient Insurance Coverage
Ample insurance is crucial for shielding you and your family from a financial emergency. Have an active life insurance? If so, do you have sufficient life insurance to cover the costs of your funeral, any incurred medical bills, and a temporary living expense?
Do you have life insurance for that person if you’re divorced or if you rely on them to pay child support? What would happen if they died, and you stopped getting child support? You need to get life insurance for you and your ex if it would seriously interfere with the survival of your family.
Do you have either homeowners’ or renters’ insurance? Again, is it sufficient if so? Always review the possibility of accidents like a flooded basement from a busted septic tank and acquire adequate coverage.
Keep Some Cash Accessible
Another item to add to the list of useful possessions, especially in the event of a natural disaster. Always have some cash on hand. It is so common for us to experience power outages during a tropical storm and hurricanes in South Florida.
If the power outages affected our area, chances are, surrounding businesses like the ATM at the local bank is inaccessible. Making a beeline to the ATM to withdraw at least $250 before an event is officially apart of the preparation plan.
I advise keeping no more than $500 in cash; after all, you need to be able to replace it if your house were to be robbed. It wouldn’t be disastrous, just inconvenient. Additionally, this money should be kept in small bills, regardless of the amount you choose. Keep in mind that under these conditions, these businesses might not be able to cash a $50 or $100 bill.
Diversify Your Path
You’ve probably heard that diversifying your investment portfolio is a good idea. And you should absolutely do so by investing in stocks, bonds, ETFs, mutual funds, cryptocurrency and so on. Instead of putting all your money into stocks, you should also diversify the banks in which you keep your money.
With the recent bank failures, I know many people are concerned that their money will also vanish. That is why you must keep your liquid funds (emergency, sinking, and checking accounts) in FDIC-insured accounts.
Not only that, but you should spread your money around. Why? If your bank fails and your money is in an FDIC-insured account, you will eventually get your money back. They will first seize all that bank’s assets, including your money. You still need money to get by while you wait for the FDIC to do its job and release your funds.
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That’s why I recommend putting your money in multiple banks. Personally, I use two different banks and a credit union bank. This way, if a bank you use fails, you’ll still have access to at least some of your liquid funds.
I also prefer to hold physical monetary goods, so I invest in both gold and silver coins and bars. My go-to investment bullion dealer is APMEX. I have been a customer since February 2016 and has been satisfied with their selection and service.
Though the world might seem intimidating in these unsettling times, history is a testament to how resilient people can be. You can give you and your family a solid financial foundation by being proactive and managing your money well. So, let’s stay informed, make plans, and approach the future with assurance. With the actions you take today, your financial security will start.
Don’t have time for the full article? Read this!
The article provides tips for financial security in crisis, including establishing an emergency fund, maintaining a food stockpile, and keeping important documents accessible and secure. It emphasizes the importance of having a six-month emergency fund for a recession, as it can provide a cushion for the family during a difficult time. Additionally, it suggests keeping important documents like IDs, bills, and insurance policies in a secure location, such as a fireproof box or cloud. These measures help ensure the safety and security of the family during a crisis.
To protect your family from financial emergencies, maintain adequate insurance coverage, including life insurance, homeowners’, and renters’ insurance. Keep cash accessible, especially during natural disasters, and limit it to $500. Diversify your investment portfolio, investing in stocks, bonds, ETFs, mutual funds, and cryptocurrency. Keep liquid funds in FDIC-insured accounts and spread your money around multiple banks. Hold physical monetary goods, such as gold and silver coins and bars, and use APMEX for investment bullion. Be proactive and manage your money well to create a solid financial foundation.
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