When Disaster Strikes, These Tips Can Help Minimize the Financial Impact
When Disaster Strikes, These Tips Can Help Minimize the Financial Impact – Whether it’s a hurricane, tornado, or even a house fire, it can be overwhelming for disaster victims to know where to start, especially if they’ve lost their homes and personal belongings. Hurricanes Helene and Milton have already caused significant damage, leaving many families in difficult financial situations. While the emotional toll can be immense, taking steps to secure your financial future is critical. Here are some key short- and longer-term financial tips to consider after a disaster.
1. Contact Your Insurance Provider
If your home, vehicle, or belongings were insured, reach out to your insurance company as soon as possible. Document all damages with photos or videos and create a detailed list of losses. Most insurers have a time limit for filing claims, so start this process quickly. For homeowners, this includes claims on homeowners or renters insurance, while vehicle owners should file under their auto insurance if applicable.
2. Seek Emergency Financial Assistance
Government agencies and charitable organizations often provide immediate help to individuals and families impacted by natural disasters.
FEMA (Federal Emergency Management Agency) provides disaster assistance for those in federally declared disaster areas. You can apply for help with housing, medical expenses, and personal property losses at disasterassistance.gov.
The American Red Cross offers shelter, food, and emergency supplies. It also provides financial assistance to those affected by disasters. The Salvation Army and local relief organizations also often step in to offer emergency financial support, food, and clothing.
3. Pause and Prioritize Your Spending
After a disaster, it’s important to reassess your budget. In the short term, prioritize immediate needs such as housing, food, and healthcare. If you’re unable to work or access funds, contact your bank, mortgage lender, and utility providers to explain your situation and request temporary relief. Many companies offer grace periods on bill payments for those affected by disasters.
4. Keep Important Documents Safe
If you can, gather and secure key financial documents, such as Social Security cards, insurance policies, and birth certificates. Store them in a waterproof, fireproof container. If documents have been lost or destroyed, work to replace them as soon as possible. FEMA and the American Red Cross offer guidance on replacing these records.
5. Beware of Scams
Unfortunately, disasters can also bring out scammers. Be cautious of unsolicited calls or emails from people claiming to offer disaster assistance. Only work with reputable organizations and be sure to verify the identity of anyone asking for personal or financial information.
6. Discuss Your Situation with your Financial Advisor
Working closely with your financial advisor can help you make informed decisions about prioritizing your spending and long-term financial recovery. Your advisor can offer guidance tailored to your specific situation, helping you identify which financial obligations are essential and which can be postponed or restructured during this difficult time. Your advisor can also help you explore available relief options, such as emergency funds, low-interest loans, and grants. Once the immediate crisis has passed, you can revisit your investment strategy together to ensure your portfolio remains aligned with your long-term goals, even in times of uncertainty.
7. Think Ahead to Tax Time
On Oct. 1, The IRS announced disaster tax relief for all individuals and businesses affected by Hurricane Helene, including the entire states of Alabama, Georgia, North Carolina, and South Carolina, and parts of Florida, Tennessee, and Virginia. Taxpayers in these areas now have until May 1, 2025, to file various individual and business tax returns or make tax payments. Once the impact of Hurricane Milton becomes clearer, the IRS may update its announcement to include more areas or additional relief measures.
Rebuilding after a natural disaster can be a long and challenging process, but taking proactive steps to manage your finances can help reduce stress and improve your situation. Prioritize your immediate needs, work closely with your insurance provider, and seek out the available resources to help you get back on your feet. On behalf of all of us at Savant, please stay safe!