When you think about preparing for an emergency, you might picture stocking up on food and water or making sure you have flashlights ready. Your finances deserve a place in your emergency plan, too.
A severe storm, house fire, or extended power outage can change your routine with little warning. You may need to leave home temporarily or cover costs you didn’t expect. Even accessing your money can become more difficult if an outage disrupts the services you normally rely on.
Preparing your finances ahead of time can give you more options in these stressful moments. And just like putting together an emergency kit, you don’t have to do everything at once. You can start with a few practical steps now and continue building your financial preparedness over time.
The goal is simple: make it easier to manage your money and take care of important financial needs if an emergency disrupts your day-to-day life. Here’s where to start.
For more ways to prepare your household, learn more about Maryland emergency preparedness
Build an emergency fund
An emergency fund gives you money to turn to when unplanned expenses arise. You don’t need a large balance to start one. What matters is building the habit and making progress over time.
- Start with an amount that feels manageable for your budget.
- Consider working toward enough savings to cover several months of essential expenses over time.
- Keep emergency savings in a separate account so you are less tempted to use it for everyday spending.
- Consider automatic transfers to make saving part of your routine.
Even small, consistent contributions can add up. Reaching your first savings goal is progress worth celebrating.
Make sure you can access your money
An emergency may change your normal routine and how you access your accounts. Having a backup plan can help keep your finances moving.
- Set up mobile and online banking so you can manage your accounts when you are away from home.
- Keep more than one payment option available, such as a debit card and a credit card.
- Keep a small amount of cash in a secure place in case an outage makes cards or digital payments temporarily unavailable.
- Make sure your financial institution has your current phone number and email address so it can contact you with updates on your accounts or its services.
It’s a little like keeping a spare tire in your car. You hope you won’t need the backup, but you’ll be glad you planned ahead if you do.
Organize your important financial documents
When plans change quickly, knowing where to find important information can make things easier. Create a secure financial folder with the documents and contact information you may need.
- Gather identification documents, insurance policies, mortgage or lease information, and important financial contacts.
- Keep physical documents in a secure location that offers protection from fire and water.
- If you keep digital copies of sensitive documents, protect them with strong passwords, and turn on multifactor authentication when available.
- Make sure a trusted household member knows how to access essential information if needed.
Review your folder periodically so your information stays current. Learn more about the FDIC’s guidance for preparing your finances for an unexpected disaster.
Review your insurance coverage
Insurance can help with the cost of repairing or replacing property after a covered event. Know what your coverage includes before an emergency happens so you understand what to expect if you need to file a claim.
- Review your home, renters, and auto insurance regularly to make sure your coverage still fits your needs.
- Consider risks that may affect your home or community, including flooding and severe weather.
- Know your deductibles so you understand what you may need to pay out of pocket.
- Keep your insurance company’s contact information with your other important financial documents.
If you have questions about what your policy covers, contact your insurance provider for details.
Know how to spot scams
Scammers may take advantage of the confusion and urgency that can follow a disaster. Knowing a few warning signs can help you protect your money and personal information.
- Be cautious of unexpected calls, texts, emails, or visitors asking for money or personal information.
- Take time to verify requests before sending money or sharing account details.
- Use trusted sources to check for information about scams affecting your area.
- Contact your financial institution quickly if you think your account or personal information may have been compromised.
Read the Consumer Financial Protection Bureau’s tips for avoiding scams after a disaster.
A little preparation can go a long way
You don’t have to prepare your finances for every possibility at once. Start with one step that feels manageable, whether that’s adding to your emergency savings or gathering your important documents. What you do today can help you feel more prepared if the unexpected happens.
Ready to make financial preparedness part of your emergency plan? Explore our savings and budgeting resources, learn more about fraud protection, or contact our team for help finding financial tools that fit your goals.
