Emergency Savings - Disaster Related Expenses

The more financially prepared we are means the more resilient we are when it comes to unexpected disaster-related expenses. Because let’s be honest, what disaster is ever expected? Having an emergency savings fund means you actually have to save for emergencies and disaster-related expenses. This is an extremely important topic that many of us forget about until we are put into an emergency situation. The 2021 Atlantic hurricane season officially starts June 1^stand extends all the way to  November 30^th.According to the National Oceanic and Atmospheric Administration, (https://www.noaa.gov/news-release/noaa-predicts-another-active-atlantic-hurricane-season) “For 2021, a likely range of 13 to 20 named storms (winds of 39 mph or higher), of which 6 to 10 could become hurricanes (winds of 74 mph or higher), including 3 to 5 major hurricanes (category 3, 4 or 5; with winds of 111 mph or higher) is expected. NOAA provides these ranges with a 70% confidence. “   Now is the time for communities along the coast to be preparing and we want to help prepare you for this hurricane season. Creating a budget for disaster-related expenses that includes your income and fixed expenses is a good way to prepare. FEMA suggests taking it a step further and, “estimate costs of insurance deductibles, possible mandatory evacuations and essentials like food, clothing, shelter, gas and emergency medical assistance.” Now you have a good idea how much money you will need and you can create a savings plan to get you there. 

 

NOAA’s Climate Prediction Centeris predicting another above-normal Atlantic hurricane season. Forecasters predict a 60% chance of an above-normal season, a 30% chance of a near-normal season, and a 10% chance of a below-normal season. However, experts do not anticipate the historic level of storm activity seen in 2020 (noaa.gov). Although this season is predicted to be lower than previous years it still should become a priority when budgeting your finances. Below is a chart to get you started:

Some general tips include: 

·       Create a disaster budget that includes the estimated cost of expenses such as those mentioned above. This gives you a good idea of how much you will need to save each month to be prepared by the time Hurricane season enters the peak period (see below). This also motivates you to save and reach a goal which is a good habit to form. TIP: Though Hurricane season begins in June,  historically speaking 96 percent of category 3, 4, and 5 hurricanes take place in the “peak period” of August through mid-October in the Carolinas.

·       Open a savings account for emergencies and start adding little by little, it will add up over time. Determine how long it will take you to reach your disaster budget goal if you consistently save x amount each month. Never save more than your fixed expenses/ household budget will allow.  Not sure how much you can afford, our licensed financial education counselors can help with this. (https://originsc.org/financial-education-coaching/)

·     Withdrawal cash for necessities (the storm may put electronic systems down)

·     Put important documents in a safe place (waterproof bags)

Written by Allie Ryan & Lindsey Jenkins

Sources:

1.    https://www.fema.gov/press-release/20210318/fact-sheet-now-time-prepare-your-finances-hurricane-season

2.    https://www.noaa.gov/news-release/noaa-predicts-another-active-atlantic-hurricane-season