Welcome to Day 9 of the free Master Your Money course!
In our household, I manage most of the bills, financial accounts, and more. I know I’m not alone either – in most families, one person usually handles all of these things. I’ve been in charge of our important information for years, mainly because it’s just something I know I can do and we’ve fallen into a routine now after doing this for so long.
Recently though, we realized that this could turn into a financial emergency disaster. I manage everything just from my memory, so nothing is actually written down and most of our bills are either auto-pay or paperless, so there is no paper record in our house of anything either.
This could be a financial emergency disaster because if something were to happen to me, I honestly do not know what Wes would do. It would make everything much more difficult for him when he would already be having a hard time, and that is not something anyone wants to deal with. Having some sort of financial emergency response plan is something we need to create.
While to some this situation may be no big deal, I know there are many, many families out there who would be very lost if something were to happen to the person who usually manages their financial situation. Accounts could get lost, bills may be forgotten about, and more.
It’s best to keep a financial emergency response plan of everything just in case something were to happen, even if it’s something no one ever wants to think about. Having one just makes life so much easier.
My top tip is to check out the In Case of Emergency Binder to help you with creating your own emergency binder. This is a 100+ page fillable PDF workbook. The In Case of Emergency Binder was created to remove significant complications from the process and help you actually get your important information ready. The research is done, the workbook is put into easy to follow sections, and everything you need is included. Please check it out here.
Below are three easy steps to creating a financial emergency response plan for your family.
1. Collect all important documents, bills, usernames and passwords, and so on.
This is probably the hardest part. You should sit down and try to think about all of the bills and accounts you have.
You might miss one or two, so it’s best to go through these accounts as you pay your bills as well so that you can make sure everything is included. Also, don’t forget to keep everything up-to-date as information can change over the years.
Some accounts, bills, etc. you may want to record include:
- Bills directly related to your home, such as your mortgage or rent, gas, electricity, TV, internet, sewer, trash, water, and so on;
- Life insurance information;
- Health insurance along with any important medical information such as doctors, medications, illnesses, etc.;
- Home insurance along with information related to property taxes, important documents, and so on;
- Car insurance and car registration information;
- Debts such as credit cards, student loans, etc.;
- Social security cards;
- Copies of driver’s licenses;
- Death certificates (hopefully you don’t have any of these, but if you do then you want to keep them safe);
- Will and/or trust papers;
- Income information, such as if you have passive income that comes in;
- Tax information such as recent tax returns;
- Safety deposit keys;
- Bank, savings, retirement, and investment accounts;
- Birth certificates;
- Phone numbers, usernames, and passwords for anything important; and so on.
2. Keep your financial emergency response plan somewhere safe.
After you collect all of this information, you will want to put it somewhere safe.
A lot of this information could lead to a disaster if an identity thief were to get a hold of it all, so it’sbetter to be safe than sorry.
I recommend keeping it in a safe in your home or something that is fire/water proof.
You don’t just want to save it in a random place on your computer either as you never know who will access it in the future. There are safe ways to store stuff on your computer, you just have to make sure the information is encrypted and that you always completely trust the internet connection you are on.
3. Explain everything to your loved ones.
Collecting all of this information is not enough.
You will want to go over everything with the person who would be next in charge after you, as they may have questions about how to access certain accounts, how to pay different bills, and so on.
You also want to make sure that this person knows where this information is and that they can easily access it. If you store everything on your computer but then they don’t know the password to your computer, that isn’t going to help anyone.
Well, that’s it for today. Tomorrow you will receive the next lesson that will explain the importance of making more money. Stay tuned!
Michelle Schroeder-Gardner MakingSenseofCents.com