How to Prepare your Finances for an Emergency or Disaster

With all the uncertainty in the world, including pandemics, invasions, wars, and natural disasters, it reminds us we all need to plan so we are financially prepared. There are many situations in which you need to be financially prepared, including hurricanes, house fires, floods, pandemics, and more. Proper planning, including saving emergency money with a emergency savings fund, is key to avoid a personal financial crisis. Here we review some important steps to make sure your finances are ready for emergencies, natural disasters, and other related events.


Use this video lesson on the topic to discuss the personal financial concepts of

  • Financial Planning
  • Saving Money
  • Insurance


Hand out the worksheet below (see the GET LESSON button near the bottom of the page).

Show students the video and have and have them complete the worksheet.  Then have a discussion about the importance of preparing your finances for an emergency. Review the questions on the worksheet.


Watch on YouTube


9-12, Young adults, Adults


60 minutes

Preparing your Finances

There are many situations in which you need to be financially prepared, from natural disasters such as floods and hurricanes, to public health crises. Proper planning is key.  It is important to assess your income and budget, in order to be prepared for the unexpected. Anyone can experience financial emergencies. Without a plan, it may be difficult to recover from the damage. 

Americans are severely under-prepared for natural disasters and sudden expenses. Although we hope that disaster will never strike, in today’s environment we know nothing is certain. It’s worth doing some research to make sure you are financially sound no matter what. Here, we will show you some ways to help protect your finances.

Make an emergency savings fund

The first thing you should do is set up an emergency savings fund.  In case you lose your job, try to save six months of your income to ensure you have enough money to pay for essential expenses. Even if you have only three months of income to save, it’s still a good start, and twelve months is even better.  If you don’t find yourself in a dire situation, having an emergency fund can still be a great way to help cover unexpected expenses.

Also, companies are always looking for ways to reduce costs and remain afloat during natural disasters, which can lead to furloughs or layoffs. In the worst case scenario, it’s essential to have a cushion to supplement or replace your income.

It is important to remember that emergency funds must be readily available.   So consider a bank savings account, for your emergency funds. In an emergency, you also need cash at home, so make sure you have it.  You should have enough cash in your emergency kit to cover food and other essentials for at least three days. This will come in handy if you are unable to withdraw cash from an ATM or bank, or if electricity is out, or you have to travel.

Electronic Payments

Set up Direct deposit and electronic payments. You may not be able to leave your home or travel far if there is a natural disaster. Direct deposit can be set up by your employer if you are employed. It will guarantee that you are paid even if your bank is closed. This will reduce your chances of losing your checks. It also gives you instant access to your money which can be very important in times of financial stress.

You might also consider setting up auto payments to pay your bills.  Protecting your credit is an important part of financial security. You should establish auto-payments for major debts and bills.


Take into consideration having appropriate insurance coverage.  Insurance is designed to protect you against any unfortunate events and is an essential part of financial emergency preparedness. You’ll be grateful if you have it, should anything happen. There are several types of insurance you should consider.  This includes Homeowners insurance.

Homeowner Insurance

Homeowners should also be aware that although standard homeowners insurance covers most extreme weather conditions, there are some natural disasters that aren’t covered by the policy and will require additional coverage. For example, many standard homeowners insurance policies do not include flood coverage or earthquake damage. Consider additional insurance if your area is susceptible to either.

Renters Insurance

You may believe that you are covered by your landlord’s homeowners policy even if you’re not a homeowner. This is true for your home’s structure, but it doesn’t cover your personal belongings. Renters insurance is the solution.

Auto insurance

Comprehensive auto insurance will protect your vehicle against the most common natural disasters such as floods, fires, hurricanes and earthquakes. You will also be covered for smaller-scale damage that is not your fault, such as a tree falling on your vehicle.

Life Insurance

Life insurance protects against the unthinkable. It will help your family pay off any outstanding debts, and provide housing and living expenses for your loved ones in the event you are unable to work. It is an essential part of your financial emergency preparedness.

Although it may seem tempting to cut corners in insurance in order to save some money, investing in the right coverage in the future will help you save even more if you have to file a claim.

Make a Home Inventory

Make a complete inventory of your home. This includes all your personal possessions, including electr  onics, furniture, kitchen appliances, clothing, and other household items. Even if you don’t own any expensive items, the value of your belongings can quickly add up. 

Home insurance is for covering your home and belonging, and you will need this inventory if you need to file a claim. Documentation of your belongings, using photos, descriptions, and estimates, will help you file a claim more quickly. You should photograph the exterior and interior of your house, including the landscaping. Take special note of any improvements. These may help to increase property value and assist with insurance claims.

Collect physical copies of important documents. This includes Birth certificates, Marriage certificates, wills, deeds, tax returns, and insurance policies. It’s easy to store important financial documents online in today’s digital age. You can use a flash drive to save your documents.  Cloud storage allows you to back up your tax returns, insurance information, receipts, and other important documents from anywhere. However, you should also have physical copies.  Make copies of such documents as birth and marriage certificates and store them digitally.

You will need to keep paper copies of all documents safe in a fireproof and water-proof container in the event of a natural catastrophe that results in power loss or interruptions to internet access. These papers should be kept handy so that you can easily find them in case you need to evacuate your house.

This has been a summary of some of the things you should consider for your financial plan.  Your own situation may be different, so be sure to consider other things you need to include in your own personal plan.


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