Fight Back with Preparedness

Disasters are unpredictable. Even with prior warning, few are ever fully prepared for the emotional, physical, and financial toll they bring. Right now, we find ourselves in the middle of a global health crisis, an economic shift felt by millions, and in the throes of battling a series of back-to-back natural disasters. Amidst these trying times, we must remember – disasters do not stop, and we cannot sit by idly, becoming victims of circumstance. The best way to fight back against the unknown is by being prepared.

The Importance of Financial Preparedness

Devastation strikes without discrimination, and it is never clear when it will impact you and your community. It is often said that the best offense is a good defense, and preparedness is just that. Financial preparation for emergencies can save you and your family tremendous heartache and stress after disaster strikes. The simple actions you take, or do not take, today can greatly affect your future and way of life. According to the Federal Emergency Management Agency (FEMA), more than 25 million Americans were impacted by natural disasters in 2017 alone. Additionally, in the past three years, natural disasters have caused nearly $500 billion in damage and losses.

While it is not possible to control the disruptions that disasters bring, we can control how ready we are to face them. Financial literacy is the cornerstone of preparedness – the two go together. When you understand the mechanics of money and resources and how it can be leveraged to bring you to your desired future, you attain a sense of control and empowerment you may not have had before.

Many times, individuals can tend to focus on what they do not have as a reason for delaying emergency preparations. Rather than focusing on what you do not have, think about shifting your focus on what you do have and maximizing its output and potential. Remember, consistently taking small actions yields big results over time.

Steps to Financially Prepare For a Disaster

Here are a few key steps that you can take to strengthen your financial emergency preparedness:

1. Make savings a priority. It is important to understand that federal disaster assistance will not make you whole after a disaster strikes – you must make saving and proper insurance a priority. For your savings, consider creating an additional “cash-on-demand” savings account that you can contribute to regularly. This account should be easily accessible in case you need to evacuate quickly.
2. Maintain proper insurance coverage. After Hurricane Harvey in 2017, the average flood insurance payout to flood-impacted homeowners was $120,000. Conversely, homeowners who relied solely on FEMA federal assistance received only $4,000 to $7,000 on average. Therefore, it is important to understand your risks and ensure your assets have the appropriate level of coverage. Review your policy options and other relevant paperwork regularly to ensure that information is up to date.
3. Have a written financial plan. A comprehensive financial plan serves as your road map. It keeps you focused on your desired destination and outlines the actions needed to get there.
4. Safeguard important financial and legal documents. When disasters strike, homes and properties are often severely damaged or destroyed. As a result, many people lose access to critical documents like mortgage records and birth certificates, which are helpful when applying for recovery assistance. To protect your information, make both physical and digital copies. Store the digital versions securely in the cloud, in your email, or on a mobile device so you can access them anytime, from anywhere.

Get Help From Financial Resilience Experts

If you need assistance during this process, Operation HOPE may be able to help. For over three decades, Operation HOPE has empowered individuals and families through financial literacy, with a steadfast commitment to preparing people for financial disasters of all kinds—and supporting them through recovery. Through its HOPE Coalition America (HCA) initiative, the organization offers free financial disaster preparedness coaching to help clients bounce back from both natural and manmade disasters.

Additionally, Operation HOPE’s financial wellbeing coaches are trained to walk alongside clients during their most vulnerable moments, helping them regain a sense of dignity and stability. They assist with creating emergency financial plans, negotiating mortgage payments, applying for FEMA post-disaster assistance, speaking with lenders about loan terms, and more.

Life is an adventure – plan for it and be ready for the unexpected. For more resources, visit Ready.gov.

John Hope Bryant is an American entrepreneur, author, philanthropist, and prominent thought leader on financial inclusion, economic empowerment, and financial dignity. John is the founder, chairman, and chief executive officer of Operation HOPE, Inc., a provider of financial literacy, financial inclusion, and economic empowerment tools and services in the United States (US) for youth and adults.

Brock Long is the Executive Chairman of Hagerty Consulting and the former Administrator of the Federal Emergency Management Agency (FEMA). During his tenure at FEMA, he led responses to major disasters and implemented pivotal initiatives to strengthen emergency management systems. With over 25 years of experience, Brock now enhances Hagerty’s leadership and advocacy efforts, advancing the future of emergency management.