Personal Finance Disaster Plan

Protect yourself with a Personal Finance Disaster Plan. The small amount of planning it requires can preserve a lifetime of earnings.

Be adequately insured
Comprehensive insurance coverage is crucial for all homeowners. Consider adding a guaranteed replacement cost policy so you could rebuild at today's prices (plus a little extra to meet current building codes).  Flood insurance is also a wise investment, as water damage is common and extremely expensive to repair.

If you rent, protect your belongings with renters insurance, it typically covers damaged, destroyed or stolen property. Increase your security with a policy that pays for a hotel if your home becomes uninhabitable.

Establish an emergency fund
Having ready money available in the event of a disaster is crucial. Aim to save at least three months of income. Remember, you may have extraordinary living expenses if you can't move back in to your own quarters. Create emergency savings with an automatic monthly deposit from your checking into a savings account.

Keep most of your emergency fund in savings or a money market account, but store a small amount of cash in your home or wallet. You may not be able to get to your financial institution or an ATM machine for a while if there is widespread damage.

Keep your credit cards handy
While credit cards are not intended to take the place of an emergency fund, they can be very useful if you need to check into a hotel or rent a car during a crisis. If you currently have credit card debt, concentrate on repaying what you owe so you have more available credit in emergencies.

Plan for your estate
If you have loved ones who depend on you for financial support, it is vital to have a will drawn up if you don't have one. Dying without a will may lead to court battles that erode the value of your estate, and assets being transferred to those who may not be your preference.

Safeguard your financial information
Being organized now will prevent panic later. In a home safe or firebox, keep:

• Enough cash for a few days worth of food and shelter
• Insurance policy documents, copies of deeds and titles to your property
• Originals of wills and powers of attorney, if not with your attorney or local registrar
• Backup of computerized financial records and a key to your safe deposit box
• Checking, savings, loan, credit card, and investment account information

In a safe deposit box, keep:

• Originals of deeds and titles to your home, car and other real property
• Appraisals of expensive jewelry and heirlooms
• Originals of previous years income tax returns
• Certificates for stocks, bonds, and other investments
• Copies of wills and powers of attorney, if not with your attorney or local registrar
• Home improvement records and household inventory documentation

For Financial First Aid, contact BALANCE counselors for confidential financial advice. BALANCE services are provided free of charge, courtesy of your credit union. Call 888-456-2227 or log on to www.balancepro.net for more information.