Financial Preparedness

The state of your financial preparedness will determine how you survive a job loss, natural disaster, economic collapse and catastrophic medical emergency.

Recent natural disasters and economic conditions around the world give us an indication of the ineptness of governmental agencies when dealing with major catastrophes. The repeated scenes on the news of people waiting to get handouts should be a reminder.

If you prepare beforehand, you will not be at the mercy of the government or charities to take care of you and your loved ones.

Awareness

We live in a highly globalized economy whose interdependence is forever linked. No matter how much you want to isolate yourself, the ripple effects of an economic crisis halfway around the world can dramatically affect your financial situation. Financially distressed countries in the Eurozone, real estate collapse in China and oil prices from the Middle East can affect your finances almost immediately.

Financial preparedness means being aware of what is going to take place before it happens and not waiting for it in the evening news. Learn about the natural disasters in your area and take measures to reinforce your home and buy the right insurance.

A catastrophic medical emergency can happen at any time, and, whether you fully recover or not, you have to make plans to support yourself. Get a full checkup and have full diagnostic tests to determine if you are at risk of heart disease, stroke, cancer, Alzheimer’s or other medical conditions with devastating outcome.

Job security is no longer a reality; the days of working for one company until retirement no longer exist. Research the company you work for and find out the health of its finances and long-term survivability. Determine the role you play in the company and take an honest and realistic assessment to see if you will be relevant in the company.

Funds

Financial preparedness means having enough funds to cover your expenses for a minimum of three months. This is a very optimistic number so you should try to save for at least six months and preferably for a year. In case of an economic collapse, you have to withdraw your money from banks as soon as possible.

If there is a natural disaster, job loss or medical emergency, you can put your money in short-term saving accounts so you can have some money until you recover. You cannot underestimate the value of cash when disasters strike; always have some cash in your home. Keep only small-denomination bills of 20’s, 10’s, 5’, and 1’s; this simplifies transactions and protects you from possible robberies.

If the value of the dollar falls uncontrollably, your best choice is gold and silver. Precious metals will always hold their value when other commodities become unreliable. Keep a good balance of silver and gold. You can use the silver for short-term transactions and keep the gold for the long term.

While you’re socking away your emergency money, consider putting some of it into long-term-storage food. You can’t eat money, even gold, and in the event of a major disaster, food will be worth its weight in gold. Not only that, but in smaller, less disastrous scenarios, having food on the shelves, so you can use what available funds you have on other necessities, can definitely make a difference in your financial survival.

Protection

You have to take the protection of your family into your own hands and be responsible for them. Financial preparedness is one form of protection, and one of the best ways to hedge any financial disaster is insurance. After you research the disasters in your geographical location, buy enough insurance to cover your assets.

Part of financial preparedness is taking the time to fully understand your liability and coverage. Find out if you need writers to cover any assets not covered by your insurance, and buy umbrella liability insurance to protect you from unforeseen financial losses.

You can buy medical and employment insurance to protect you from extended hospitalization and job loss. If a disaster or economic collapse is prolonged, you may not be able to rely on law enforcement for protection. Take adequate measures to ensure the safety of your family.

Preparedness

“In the field of observation chance only favors the prepared mind,” said Louis Pasteur. Financial preparedness, like all other forms of preparedness, requires observation of your immediate and extended environment. If you are aware of what is taking place in the world economically, politically, environmentally and socially, you can take the necessary steps to protect yourself. We want to believe our government will be there for us, but that is not a guarantee we can count on … ask Katrina survivors.

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