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Monday, September 18, 2023

Top 11 Budgeting Tips for Emergency Preparedness

 Original Article

By Linda Loosli 

When it comes to emergency preparedness, families often think about stocking up on food and supplies or having a plan for evacuation. But what about the financial aspect of being prepared for an emergency? Creating a budget is an important part of your plan for being prepared for anything life throws your way. Here are some budgeting tips to consider as you put your plan together for successful emergency preparedness.

Top 11 Budgeting Tips for Emergency Preparedness

Top 11 Budgeting Tips for Emergency Preparedness

1. Have an Emergency Fund

Preparing for the unexpected is what emergency preparedness is all about. An emergency fund is cash that you set aside specifically for unexpected expenses like medical bills, home repairs, or lost income. Having an emergency fund can help you avoid going into debt if you experience a financial setback. Aim to save enough money to cover three to six months of living expenses. But don’t hesitate to continue to grow it by more than that because you never know what challenges might come your way. Most of the time you won’t have any warning when a disaster strikes, so that’s where some effective planning comes into play.

2. Leave Your Emergency Fund Alone 

When you’ve made the effort to set money aside strictly for emergencies and savings, don’t sabotage what you’ve worked so hard for over the past several months by turning around and spending it on things you probably don’t need. Don’t cave to the temptation to spend it now, leave it alone! This is easier said than done, but it can be helpful to set up a separate bank account for your emergency fund so you’re not as tempted to spend it. So remember, emergency funds are only to be used when directly related to expenses that have to do with those unexpected emergencies that may come your way, no matter what those true emergencies may be.

3. Make a Budget

A budget is a plan that outlines how you expect to spend your money each month. When you make a budget, you’ll need to track your income and expenses so you can see how money is coming in, how much is truly available after taxes, and where your money is going. This can be very eye-opening for some people because they’ll see exactly how much money they’ve been wasting on things that aren’t necessary.

It will also help you make informed decisions about how to spend your money and ensure that your spending aligns with your goals and values. Also, don’t forget to budget for things like flashlights, blankets, chargers, medications, passports, gloves, duct tape, plastic sheeting, and even whistles. These are often emergency preparedness items people forget to think about when they’re putting emergency savings together.

Yes, we all need to have some recreation and fun things we cherish, but with a budget, you can learn to prioritize where the money is spent so you don’t get caught short when you need funds the most.

4. Make Adjustments

If you find that you’re consistently overspending in certain areas, it’s time to make some adjustments. One way to do this is to cut back on discretionary spending, like eating out or buying new clothes. You may also need to consider making changes to your budget, like finding ways to reduce your monthly expenses, or possibly getting a second source of income or a totally different job if your current income source doesn’t show signs of improvement. After all, a budget is not something that’s set in stone and can be tweaked as you go. Make sure you’re not skimping on essentials when it comes to disaster preparedness.

Who would have thought the cost to rent or buy a home, food expenses, and other necessities like a vehicle to get to work would experience the inflationary pressures we’re seeing right now? At least with a budget, you can track how things have changed over the past few months and work to figure out how to make the necessary adjustments.

5. Live Below Your Means

One of the best ways to save money is to live below your means, which means spending less than you earn each month. This may mean making some sacrifices, like eating out less, making your own lunch for work, stretching out the use of those clothes in the closet, or downsizing your home. Any of the efforts like these will free up extra cash that you can use to build your emergency fund or save for other financial goals.

6. Be Frugal 

Stocking up on emergency supplies is expensive and harder to do when you’re on a tight budget. But you’d be surprised about the emergency supplies that you can track down at thrift stores, garage sales, and websites like Craigslist that cost only a fraction of what you’d pay if they were brand new. While this is a great tip for helping your family pinch pennies, there are certain emergency supplies where you shouldn’t go cheap. These may include batteries, first aid kits, and communication devices. Don’t forget to stock up on things like pet food, toilet paper, and personal hygiene items (these are all items that people forget about).

7. Invest in Yourself

Another way to prepare for unexpected expenses is to invest in yourself by building up your skills and preparation knowledge. When you have more skills and knowledge, you should be able to earn more money. With the employment situation the way it is right now with so many companies looking for quality employees, you can possibly help weather a financial setback better or pay for unexpected costs without going into debt if you can find ways to increase your income. You’ll be able to make real money while doing projects and jobs that you already enjoy without having to find more time in your busy schedule.

8. Create a Debt Repayment Plan 

If you have debt, create a plan to pay it off as quickly as possible. One way to do this is by making extra payments each month or contributing periodic windfalls, such as tax refunds or bonus checks, directly towards debt repayment. Paying off debt will reduce the amount of interest you pay over time and free up extra cash each month, which can be used for savings or other financial goals.

There is nothing like the stress we all feel when it’s a challenge to cover unexpected expenses. Many chose to put these expenses on a credit card, the most costly debt you can get. Try to seriously pay off all your credit cards, and in the long term, use the funds to supplement your reserve or savings accounts.

9. Get the Right Insurance Coverage for Your Home

This may not sound exactly like a good budgeting tip, but going with a good insurance company that has adequate coverage for your home and car is something very important for you to look into. That’s especially important for those of you that live in an area that’s known for flooding, hurricanes, wildfires, and high crime.

While you may be paying a little more upfront each month, your home, possessions, and vehicles can be replaced or repaired following a devastating disaster. But choosing to go without enough or the right kinds of home insurance could leave you with a total loss, or at the very least, tens of thousands of dollars in repairs that you’ll be required to pay out of your own pocket.  The right insurance policies are a must when you’re planning for emergency preparedness.

If you have a mortgage on your home, the lender should have researched the possible need for flood or earthquake insurance. They can prove to be a little pricey, so if you’re looking to relocate, do your research, and don’t be surprised what quality coverage may cost you.

Another consideration is to look at the deductibles on your home and auto coverage. It does change the financial risks, but going with a higher deductible can reduce the cost of the coverage. That’s one reason to have a reserve fund, you can put your monthly insurance cost savings in the fund so you have a buffer when expenses for repairs come into play, just in case.

10. Best Place to Keep Your Emergency Funds 

One of the most common questions people ask is where they should keep their emergency funds. The answer to this question depends on a few factors, including how much money you have and how quickly you need access to it. If you have a large emergency fund, you may want to consider investing it in a short-term CD or high-yield savings account so you can earn interest on your money. However, if you need quick access to your cash, keeping it in a checking or savings account is usually the best option. Pay close attention to this tip as it’s one of the most important budgeting tips for emergency preparedness.

Consider getting some advice from a financial advisor. It may cost for the consultation time, but they may have some good suggestions you can live with.

11. Find Out What Emergency Relief You Qualify For

If you experience financial hardship following an emergency situation, there may be government programs or non-profit organizations that can help you cover basic needs like food, housing, and utilities. Don’t know where to even begin? You don’t have to wait around until after a disaster has taken place to learn what assistance you can receive.

Contact your local 2-1-1 hotline to find out what resources are available in your community. Finding local shelters or waiting on an emergency kit might be some of the relief you find after an emergency strikes. You will hear from agencies like the American Red Cross and the Federal Emergency Management Agency after serious emergencies, these agencies exist in the United States for that very purpose!

More Emergency Preparedness Tips

What are the 10 steps to disaster preparedness?

The following are ten steps to take in order to be better prepared for disasters:

1. Know Your Risks

2. Make a Plan

3. Build or Restock Your Emergency Kit

4. Get Involved in Your Community

5. Be Informed about Emergencies and Disasters

6. Teach Youth about Preparedness

7. Get Training

8. Practice and Test Your Emergency Plan

9. Stay Informed about Changing Conditions

10. Volunteer to Help Others in the Community Who Might Need Assistance After a Disaster Strikes

What should a good emergency preparedness plan include?

There are a number of things that should be included in a good emergency preparedness plan. First, it’s important to have a list of emergency contacts, including family, friends, doctors, insurance agents, neighbors, etc. It’s also important to have a designated meeting place in case of an emergency. Additionally, it is important to have a plan for how to evacuate your home and where to go in case of an emergency. Have a plan for how to survive without power or water for a period of time. I

It takes some serious research to determine how much food and water your particular family needs and how to properly store it for future use. Consider checking out the posts in my archive for some great guidance.

What are the 6 requirements of an emergency plan at school and work?

  1. There must be a clear chain of command and communication procedures in place so that everyone knows who is responsible for what during an emergency situation.
  2. All staff, faculty, and students must be trained in how to safely evacuate the premises and where to assemble once they are outside.
  3. There should be a designated safe area away from the building where people can go in the event of an evacuation.
  4. Emergency exits should be clearly marked and all staff should know where they are located.
  5. First aid supplies and equipment should be readily available and staff should know how to use them.
  6. The plan should be reviewed regularly and updated as necessary to ensure that it remains effective.

What is emergency preparedness protection?

Emergency preparedness is the process of preparing for and responding to emergencies. It includes creating a plan, assembling an emergency kit, and being aware of the dangers that could affect your area.

Being prepared can help you survive an emergency situation and protect those around you. It is important to have an emergency plan in place so that everyone knows what to do in case of an emergency. You should also have an emergency kit that includes supplies that will help you and your family in case of an emergency.

How to budget emergency funds??

It is important to have a budget for your emergency fund. You never know when an emergency will occur, so it is important to be prepared. Here are some tips on how to budget your emergency fund:

  • Determine how much money you will need to save. This will depend on your individual situation and needs. You never have too much.
  • Set up a separate account for your emergency fund. This will help you keep track of your progress and ensure that the money is easily accessible when you need it.
  • Make regular contributions to your emergency fund. If possible, set up automatic transfers so that you don’t have to think about it.
  • Keep your emergency fund in a safe place. A high-yield savings account is a good option. (if there is one, right?)
  • Review your emergency fund regularly to make sure it is still adequate for your needs.
  • Use your emergency fund only for true emergencies.

If you use it for non-emergency purposes, you’ll erode its value and it will have less available when you really need it. Following these tips will help you create a sound budget for your emergency fund, giving you peace of mind and the security of knowing you are prepared for whatever life throws your way.

Final Word 

Budgeting may not be the most exciting aspect of emergency preparedness, but it’s definitely one of the most important. By following these budgeting tips, you’ll be better prepared financially if an unexpected event occurs. And when it comes to being prepared for anything, that’s what counts! What budgeting tips for emergency preparedness would you add to this list? May God Bless this world, Linda

Copyright Images: Emergency Preparedness AdobeStock_500411974 by New Africa

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