Financial preparations in anticipation of calamities
Natural calamities can surely wipe out an individual’s hard-earned money if unprepared. That’s why it is very important for everyone, especially Filipinos who live in calamity prone areas, to do financial preparations for calamities.
On an average, 19-20 cyclones enter the Philippine area of responsibility with 7-9 reaching landfall. When extreme typhoons happen, there is also a high chance for flash floods to occur. Apart from typhoons, an average of 100-150 earthquakes are also experienced in the country per year.
1. Revisit your insurance policies
Whether these are life or non-life insurance policies, make sure that you regularly check your contracts to see if there is a need to bump up your coverage. Is your current coverage enough to cover all expenses should an extreme disaster hit. One of the best financial preparations you can do in anticipation of calamities is getting your home insured. Although this isn’t a common practice in the Philippines, consider looking for house insurance so that you get your home protected from fire, quake, or other forms of calamities.
A calamity can also cause injury, because of falling debris or environmental health hazards. Your insurance coverage shall serve as your financial cushion. Talk to your financial advisor to see if your current insurance policy is properly designed to save you from these possible financial stresses.
2. Increase your emergency fund
If a natural disaster forces you to evacuate and stay in that area for a long period of time, you would surely be unable to work, thus the lack of salary coming in. This is why it is utterly necessary to continuously boost your emergency fund. Only to be touched during emergencies, this fund must be enough to cover at least six months of your living expenses and must be easily accessible. If you can prepare a year’s worth of expenses in your fund, that should be better as the additional cushion will prepare you against calamities
3. Digitize your important documents
Living in a fully digital era means one must be able to adapt to the changing times. At the face of a calamity, you’d be automatically saving yourself, your family members, and pets because these are your priorities. Your important documents shall most probably be left behind–worse, be destroyed. We all know how much effort, time, and money it would cost one to reapply for government issued IDs and retrieve other pertinent documents. Having these documents digitized as early as you can saves you tons of money.
4. Keep your credit line healthy
During an intense emergency evacuation situation, you might be able to pick up only a few items such as your phone and wallet. One of the best ways to financially prepare for calamities is to have a credit card with balance available to use immediately. Just be sure to pay that bill on time to avoid bad credit and massive late fees. If there’s a chance you may miss your credit card bill due date, a more affordable option might be to consider a salary loan with simple interest. The link to your salary will help you avoid missing payments and can help build your credit history. Therefore, you should take every opportunity to maintain a healthy credit line so that you can immediately be issued with a calamity loan or personal loan.
As your financial buddy, SAVii always wants to make sure that you’re 100% financially ready for situations that one would not usually expect. We hope these tips will help you be more financially prepared for when calamities arise.
Should you or your colleagues experience calamities in your respective areas, do not hesitate to consider SAVii’s calamity loan to finance your needs. We’re always ready to assist! 😉