How to financially prepare for a disaster

December 1, 2018 0 Comments

How to financially prepare for a disaster:

Disasters come often. More often lately it seems. While Pinterest is rife with all sorts of mitigation measures, which I’ll be covering in depth soon, there’s not much emphasis on financially preparing for a disaster. That’s what we are going to cover in this post.

If you’ve been following me for a while you know that I love Dave Ramsey. He has a tried and true method for gaining financial independence. We can use his methods to gain disaster independence also.

If you’re not familiar with DR check out his website at:

Let’s recap his baby steps:

  1. Commit to quit borrowing money (ie using credit cards and taking out loans)
  2. Save $1000 for emergencies in a separate savings account. (if you live in a high cost of living area having $2000 may be prudent. You’ll have to determine that based on your finances.)
  3. Pay off all debt using the debt snowball method. (Smallest debt to largest debt regardless of interest rate; only going by balance size.)
  4. Save 3 to 6 months’ worth of Expenses for emergencies (like job lay off etc).
  5. Start contributing 15% of monthly income into retirement (401k, Roth IRA. Bonus if its employer matched!)
  6. Save for your children’s college. Start a mutual fund so if your kids don’t go to college you/they can use those funds for another purpose!
  7. Pay off your home early! Using that debt snowball that you have left after all your consumer debt is paid, your contributing to your retirement, and to your kids’ education, use what’s left to pay off your mortgage early.
  8. Build wealth and give.


So now that we have a baseline for some financial goals, here is where the disaster preparedness comes in.  DR is all about sinking funds. A sinking fund is a fund, account, or envelope that you put the monthly amount of an annual bill into. For example, Car tags. If you pay $600 for car tags each year you should be putting away $50 into your fund, account, or envelope each month as part of your budget. (600/12=50).

We have a line item for preparedness that we use each month to purchase or outfit our family for a disaster. We save the money and store it in an envelope if we are trying to save up for a larger purpose also.

Here are some other tips to financially prepare for a disaster.

  1. Have cash on hand. $1000 is a nice round number in case the power is out, and you need to purchase supplies.
  2. Keep a disaster fund. Always save for a rainy day.
  3. Ensure you have the proper insurance coverage. Home owner’s insurance, flood insurance, earthquake insurance, and personal property insurance are all great plans to have even if the risk isn’t 100%.
  4. Keep a well-written record of the high-value items in your home. You can keep a notebook, word document, or better yet, take a photo of each room to showcase the items and keep it on a thumb drive in a strong box.
  5. Open a safety deposit box or purchase a strong box to keep hard copies safe! Here are some examples of what to keep in there:
    1. birth certificates,
    2. marriage and family records,
    3. adoption papers,
    4. property deeds,
    5. wills,
    6. insurance policies,
    7. passports,
    8. Social Security cards,
    9. immunization records,
    10. bank account information,
    11. credit card account information,
    12. (insurance, mortgage, loans etc)
    13. Medical records and/or information
  6. Take advantage of direct deposit and automatic bill pay. At least money will be coming into and out of your accounts as it should.
  7. Have AT LEAST your insurance deductible set aside in a separate account for emergencies. It’s a good rule of thumb to go by. If your insurance deductible is $5000 for disaster, have at least that much in a separate account or earmarked.
  8. Know what your insurance policies cover. Call and talk to your insurance rep about what is covered, what isn’t, where the loopholes are, and how long it can take to get funding.

Here are some resources:


Spam me with your favorite financial disaster preps!



Mil-Spec Mom

Nila is an Army Wife, mother of two boys, and a firearms instructor. She is currently pursuing a double masters in Homeland Security & Emergency Disaster Management, while trying to balance the daily life of being a SAHM/WAHM. She loves ice cream and learning about self-defense as a mother. For more info please click the "About Mil-Spec Mom" tab at the top.