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Is Your Financial 'Go Bag' Packed and Ready?

Carrie Schwab-Pomerantz on

Dear Carrie: I know I need an emergency fund, but with all the disasters happening these days, what should I have ready in terms of my finances if I have to pick up and leave in a hurry? -- A Reader

Dear Reader: Between the pandemic, hurricanes, wildfires and floods, these days, you need to be as ready as possible for the unexpected. Being 100% prepared for every potential type of catastrophe is impossible, but there are definitely things you can do now to mitigate your stress and harm in the time of crisis. From packing an emergency bag with basic physical necessities to planning an escape route, being prepared in advance is essential -- and that includes preparing a "go bag" for your finances.

What to put in your physical go bag is pretty clear -- extra clothes, water, medicines, toiletries, flashlight and batteries, phone charger, items for your pets. Ready.gov has a great basic list.

But how do you prepare a financial go bag? That may not be as obvious and probably will differ from person to person. Many people are comfortable storing essential documents digitally, while others prefer having paper copies. And still, others might want a combination. But whether your go bag is physical or digital, or a bit of both, there are several important documents to gather and steps to take.

Start With Cash on Hand

Establishing an emergency fund is the first to-do, ideally with enough cash or cash equivalents to cover three to six months of essential expenses. Of course, you have to be able to get to it quickly, so make sure to keep this money easily accessible in a savings or money market account.

 

Don't have this much available? Look at your options. The CARES Act allows penalty-free, coronavirus-related withdrawals of up to $100,000 this year from a retirement account, but I think of this as a last resort. It may not seem like it when facing an emergency, but a withdrawal from your retirement nest egg now could leave you in an even worse spot down the road. Instead, focus on other ways to increase your cash, even if that means squeezing expenses or selling assets to fill up your emergency fund.

Next, be sure to keep some physical cash on hand. While we take ATMs and credit cards for granted, they may not work in a disaster. There's no set amount to target, but having enough in your pocket to cover a few days of food, gas or lodging for you and your family could be a lifesaver. Include a few checks and an extra credit card and ATM card just in case.

Organize Important Documents, From Passports to Passwords

As you assemble your go bag, start with information that can help you establish proof of identity and proof of ownership. This should include identification papers such as your driver's license, passport, Social Security, Medicare and health insurance cards, birth and marriage certificates, and military papers.

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Copyright 2020 Creators Syndicate, Inc.
 

 

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