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Preparing Financially before Disaster

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RICHMOND, VA (WWBT) – Many of you are still cleaning up and dealing with the recent natural disasters, a Hurricane and an Earthquake. It could happen again. If it does, would you be prepared financially? Financial expert say most of you are not ready. We have some tips to prevent a double disaster.

Dawnn Thornton still has some cleaning to do after Hurricane Irene. But that's the least of her worries. Irene hit even harder in the wallet.

"$2500 just for the tree removal, then we had a $500 deductible, damage to the shed," she said.

The storm wiped out her savings.

"Our insurance company said that we had to pay up front, which our nest egg, that we had, wasn't supposed to be used for that, because he just lost his job and we were living on that. Now we have none," she told us.

When it comes to natural disasters many of you prepare for the obvious; making sure you have the necessities, like water, batteries, canned food and flashlights. But financial experts say most of you don't think about money.

"One of the more important things for the average person is to really have an adequate emergency fund," said James Shepherd, CPA with Kuehl Shepherd Kozlowski. 

He says when the storm hits, it's too late. Save now. No matter how small, every little bit helps.

"It depends on the individual but typically, we recommend that people have three, no more than 6 months worth of their normal living expenses in a checking or savings account," Shepherd told us.

Another important reminder, keep financial documents in a safe convenient place.

"They should have a book where they are listing all of their insurance polices, copies of their estate documents, copies of their tax return, copies of their drivers license and social security statements," Shepherd said. 

Where ever you store those documents, make sure it's water and fire proof.

Another biggie -- review your insurance policy, at least once a year. 

"The very first thing I did was go to the exclusion section of the insurance policy and sure enough, there was a list of a lot of things that were not covered and I think the average person does not realize that. They think when they have an insurance policy it covers just about everything," said Shepherd.

Dawnn knew exactly what was covered under her policy -- she just wishes she would have had an emergency stash. Tapping into her next egg was unexpected.

"It hurts, I have a special needs daughter and if something happens to her, that was the reserve to be able to pay for surgery or medical issues," she said.

She's working to save up money for the next disaster. She knows it won't be easy.

"I am trying to find a job and then we have kids and every thing else and trying to get that money back in there is not looking promising," she said.

It's a tough lesson learned but Dawnn realizes it could have been worse.

"The one thing that was spared was everybody we know is alive. Money is just part of life, it's not life," Shepherd said.

Another piece of advice -- keep a small amount of cash in a safe place at home just in case ATMs are not working. Of course, you can always contact a CPA or other financial expert for more advice. For more tips on how to prepare financially before disasters strike, click the link below.

http://www.vscpa.com/Content/60241.aspx

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