Up to this point, the recent Southern California wildfires have demolished over 1,500 homes, caused over 550,000 residents to evacuate, created over 1 billion dollars in damage, and have scorched over 425,000 acres of land. These numbers are sure to rise and it is truly a situation that no one could have envisioned. I was not directly affected by any of the wildfires, but I thought “what would I take if I only had ten minutes to evacuate my apartment?” Here is the list of what I would take (and only giving myself five minutes to make the list):
- External Harddrive
- Nintendo Wii
- A few days worth of clothing
- Bottled water and food
- Personal documents/photos
- Digital camera/video camera
- Cell phone charger/battery chargers
- Toiletry Items
In the five minutes I took to compile the above list, I believe I made a comprehensive list of items that I need to survive and compact items that carry material value.
Just like you can never anticipate the occurrence of a natural disasters, you never can anticipate major hardships to your short term financial situation. Maybe the unexpected turn of events will be a loss of job, interest rate increase of an adjustable rate mortgage, medical problem, increasing schooling cost, or a home robbery. To make sure you’re prepared for any kind of financial emergency, I would recommend having four months of money available to provide yourself a safety net. That safety net includes money to cover the mortgage & pay for utilities, food, and transportation costs. Here are a few tips to help get that four month financial safety net:
– stagger your certificates of deposits (CDs) to mature at different parts of the year
– do not buy unnecessary material items just because you can put it on the credit card to be paid later
– understand that you may have to sell some stock assets to create cash flow so diversify wisely
– do NOT buy property that carries a mortgage that you cannot truly afford
Like the citizens of Southern California and Louisiana know too well, natural disasters can make life very difficult as well as create plenty of financial burdens. Although we will never know what to expect, it does not hurt to have a plan and a safety net in times of any financial emergency.