Financial preparedness is important and a key component to properly managing family finances. When disaster strikes, be ready. Take control of what you can, plan your finances carefully.
Not sure where to start? Check below for our Financial Preparedness Questionnaire and begin building a financial bulwark, patch areas that need improvement, and build out your Mêtis even more!
Financial Preparedness Meaning
Table of Contents
- 1 Financial Preparedness Meaning
- 2 Financial Uncertainty
- 3 Financial Questions to Ask Yourself
- 4 Financial Planning Kit
What is Financial Preparedness? Financial preparedness is taking charge of your family’s finances in advance of financial uncertainty, before disaster strikes. It is identifying and controlling what you can to mitigate the impact when things go wrong.
The Importance of Financial Preparedness
Financial disaster strikes when and how it will, without warning. Not all variables are within our control, but there are things we can do to prepare in advance. In my opinion, part of preparing financially is to control emotions, not live in a state of fear, nor become obsessive and paranoid. Maintaining a clear focused mind will help you better prepare a plan, and further enhance existing plans.
What is Financial Emergency
Be ready! Financial emergencies come at us from any angle and can be any cost that wasn’t planned for. Is your family ready for something like a flat tire? What about unexpected repairs around the house? Continuing on, what about a house fire or car wreck? Earthquake or flood? The list goes on, but the concept of being prepared is consistent.
Whether small or large, surviving difficult financial times, disasters or uncertainty can be made easier by building and enhancing financial literacy in all money matters.
Let’s start with financial uncertainty. Hopefully, for most, it doesn’t get worse. This could be something relatively trivial, a flat tire, but it could be more extreme as well. Taking time to shore up a few things is worth the effort and will hopefully make any financially uncertain or difficult times easier to endure.
Preparing for Financial Uncertainty
Financial uncertainty, while not yet an emergency, is still a real situation that needs to be adequately prepared for. Treat times of financial uncertainty carefully, like you would an emergency, and prepare accordingly. While these times may be different, taking time to implement a proper budget, create and maintain an emergency fund, and ensuring insurance is adequate and paid-up are great places to start.
Don’t wait for an actual problem to surface. Today, take financial action to ensure you are in the best possible financial position possible. Reduce your credit card debt, cut out wasteful spending, stock up on essential supplies.
Financial Emergency Examples
Financial disasters come in all shapes and sizes. Natural disasters such as flooding, hurricanes, or earthquakes are prime examples of disasters and financial emergencies. Even with the best plans, and advanced warnings these emergency situations (and others like them) bring distraction and wreak havoc. Any of them can force a family to quickly evacuate for any given amount of time.
These are just examples! The goal is to underscore the importance of being well equipped for financial emergencies in whatever form they appear.
Financial Questions to Ask Yourself
Here are a couple of ways you can ask the right questions about your family’s state of preparedness. The internet is full of ways to prepare, videos to watch, and gadgets to buy. I’d encourage anyone getting into this space to be intentional about what you chose to invest in.
The Importance of Being Prepared Before a Disaster Strikes
Anticipating and preparing what you can in advance of a disaster is optimal. However, the path to a full financial recovery can be made shorter and more effective with key components in place. There may not always be an ATM nearby. Local supplies and resources are finite; cars and houses are prone to break and need repair. Then, there are all sorts of weather-related issues. This is not a “doom and gloom” message, my friend. Instead, let’s face the unknown from a constructive perspective and protect our families and loved ones as best we can.
Financial Preparedness Questionnaire
Are you prepared for the unexpected? Unfortunately, many are not. Ask yourself these questions, treat them as a framework, and get started today!
- Do you have a plan in place for natural disasters?
- How much emergency cash do you have access to right now?
- Is your emergency fund (including cash) able to address expenses of $1,000 or more?
- Is your insurance coverage adequate (e.g. flood, earthquake, renters, auto, life)?
- Where are your key financial documents and critical records?
Financial Planning Kit
At a minimum, don’t make a difficult situation even harder. Collect and securely store these key items now, before periods of financial uncertainty (or even disaster) brews on your family’s horizon. Keep growing, keep learning, and be vigilant.
Emergency Financial Preparedness Toolkit
Here’s a starting place! Treat this as a minimum and adapt it for your situation. The goal is to have hard copies and written information in hand, in one secure location. Keep track of this Financial Preparedness kit and be careful with whom you share it!
Please hear me my friend: if disaster strikes you and your family, please be careful of the people you trust. Unfortunately, there are disingenuous characters who might try to take advantage of the situation you and your family are facing.
- Insurance policies, documentation and appraisals
- Emergency cash ($500.00+)
- Recovery Seed for cryptocurrency hard wallets
- Bank Account/ Investment Account information
- Any important documents related to your side-gig (e.g. articles of incorporation)
- Living Trust, Power(s) of Attorney, Will
- Home and Property Deeds
- Critical Investment Papers
- Drivers License/ Photo ID
- Marriage License
- Birth Certificates
- Social Security Cards
- Adoption Paperwork
- Child Support
- Immigration Paperwork
- Pet information and records
- Medical Documents (e.g immunization records, medications, etc.)
- Military Records
- Emergency Contact information for key persons and family (written down)
My friend, I hope this list serves you and your family well. Best of luck on your financial journey!