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Time for a (literal) rainy day fund

Sept. 6, 2019

Snap photos of documents and belongings to help with insurance claims


You’ve heard that expression, “Expect the unexpected,” haven’t you? But it’s much more easily said than done. Unless you have a crystal ball, how can you possibly predict what misfortunes or disasters are coming down the pike? The short answer is, you can’t. But many emergencies have similar characteristics in terms of what you need to survive them.

Money is an excellent example of this. You and your family would have different needs during, say, a tornado versus a flood, but after the dust settles (or the water dries), money is one thing you’ll need to get back to normal in both situations.

That’s why it’s important to have emergency funds at your fingertips. It may hurt a little now – maybe not so many lattes during the week – but when disaster strikes, you’ll be happy for the money you’ve socked away. If you save a little of each paycheck, pretty soon you’ll have a rainy day fund that can help you breathe easier.

Don’t forget that you’ll want some of that fund in cash. Depending on the emergency, you may not be able to get to an ATM (or ATMs and card readers may not be working). Some ready cash can tide you over for expenses like lodging, food and gas.

To keep that cash secure, you might want to invest in a fireproof and waterproof safe. There, you can also keep copies (either on paper or a thumb drive) of important documents such as social security cards, credit card information, identification, and insurance information. Also on the thumb drive, you’ll want photos of serial numbers of valuable personal belongings. Not only will such documents be safe there, but having them all in one place will make it easier apply for disaster aid and file insurance claims and more likely to get coverage for the true worth of your damaged property. You can learn more about this from FEMA’s Emergency Financial First Aid Kit.

While you’re amassing your important documents in case of an emergency, it’s a great time to take a good look at your insurance, both auto insurance and renter’s or homeowner’s. Don’t assume, for example, that you have flood insurance or water/sewer backup insurance.

No, you can’t see the future – none of us can – but you can take a few careful precautions that will help you in any number of possible emergencies. With your rainy day fund, you’ll be much better prepared for the unexpected.