NerdWallet's Smart Money Podcast
Disaster-Resistant Finances: What to Do Before and After Catastrophes
Wed, 15 Jan 2025
Learn how to prepare financially for natural disasters with practical tips on planning, saving, and post-disaster recovery. How can you financially prepare for a natural disaster? What should you do to recover financially afterward? Host Sean Pyles and NerdWallet insurance writer Caitlin Constantine discuss the financial impact of climate change and share actionable strategies to prepare for and recover from natural disasters. They begin with practical tips for disaster preparedness, including creating a home inventory, saving for emergencies, and understanding insurance coverage. Then, Kate Bulger, senior director of business development for nonprofit financial counseling agency Money Management International, joins Caitlin to discuss post-disaster recovery strategies. They explore how to work with insurance companies, access FEMA and other financial assistance programs, and avoid common scams in the aftermath of disasters. Where to turn when a natural disaster upends your finances: https://www.nerdwallet.com/article/finance/where-to-turn-when-a-natural-disaster-upends-your-finances What is FEMA and what can it do for you? https://www.nerdwallet.com/article/finance/what-is-fema To stay informed about how the Los Angeles fires and other developing news events could impact your wallet, follow NerdWallet’s financial news hub: https://www.nerdwallet.com/h/news/financial-news In this episode, the Nerds discuss: disaster preparedness, financial disaster recovery, home inventory checklist, how to prepare for natural disasters, emergency savings tips, disaster insurance, FEMA disaster assistance, post-disaster financial aid, saving for emergencies, how to avoid disaster scams, natural disaster financial planning, insurance coverage for disasters, disaster loans, flood insurance tips, tornado financial preparation, wildfire emergency planning, disaster recovery strategies, financial counseling after disasters, emergency cash reserve, how to protect finances in disasters, Small Business Administration disaster loans, keeping financial records safe, Project Porchlight, natural disaster credit card tips, budgeting for disasters, disaster financial checklist, avoiding insurance scams, rebuilding finances after disasters, climate change financial impacts, emergency financial preparedness, disaster recovery centers, handling financial trauma, managing finances after a flood, and disaster readiness tips. Learn more about your ad choices. Visit megaphone.fm/adchoices
Chapter 1: What are the financial impacts of natural disasters?
Hi listeners, this is Sean. We've all been watching over the past week as another cataclysmic natural disaster has fallen upon our fellow citizens. The fires engulfing Los Angeles are incomprehensible to those of us who have never experienced that kind of tragedy.
but it's all too familiar to wide swaths of the country that have experienced mass flooding, hurricanes, tornadoes, and other calamities just over the last year. From everyone on the Smart Money team, our hearts go out to those affected by these disasters. In spring of 2023, Smart Money put together a special series about the effect of climate change on all of our finances.
My co-host was Caitlin Constantine, who oversees home insurance coverage here at NerdWallet. As part of that series, we did an episode about preparing your finances for the possibility that a natural disaster could impact your life. So today, we're reprising that episode for those of you who are asking themselves what you can do now in case the worst were to happen. And beyond this episode,
NerdWallet has a lot of content about how to prepare for and manage your finances in an emergency. Check out this episode's show notes for a few links, including an article on where to turn when a natural disaster upends your finances. Welcome to the NerdWallet Smart Money Podcast. I'm Sean Piles. And I'm Caitlin Constantine.
We're back with the final episode of our nerdy deep dive into the broad effects of climate change on our financial lives. Caitlin, we've covered mental health, housing, banking, investing, and all the changes that have been wrought by what's happening to the planet. What's next?
Well, Sean, early in this series, we pointed out that when people hear news about climate change, it's often in the context of some catastrophic natural disaster, like a tornado, a hurricane, wildfire, flooding.
Right. And we pointed out that climate change and its effects on our finances are much broader than those disasters, although they do seem to be more powerful and frequent these days.
Yes, they seem that way because they actually are. In fact, the World Meteorological Organization, which is an arm of the UN, released a report back in 2021 that showed that climate change has caused an increase in weather-related disasters by fivefold over the last 50 years. And so today, we're going to address that directly.
Jeez, fivefold. That's enormous. And honestly, it's something that I just cannot fathom, dealing with that kind of event. I know you've been through hurricanes, so it's probably a little bit more real for you, but it's just inconceivable to those of us who haven't lived through losing everything.
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Chapter 2: How can I prepare financially for a natural disaster?
The phone number of the institution is usually right there. Your account number is going to be on that. Take pictures of them on your phone. Store them in the cloud securely. And that can be a great way and a great easy way to do it. I know a lot of people who also have the kind of a Ziploc bag approach that they'll take.
So they'll take one page of their statements for all of their different accounts, all the different things they pay. Once a year, they'll put them all into a Ziploc, shut that Ziploc and put that Ziploc wherever they put other items that they are planning to either evacuate with or put it in an area where they plan to shelter in the event of a disaster in their area. That absolutely works as well.
So one of the problems that we know that people will sometimes run into after a disaster is that banks and ATMs are like they're not functional or maybe they're just entirely gone. So there's advice out there to keep cash on hand. Do you agree with that advice? And if so, how much cash should people have and where should they be keeping it?
Yeah, so I think having cash on hand is a great idea as long as having cash on hand isn't too much of a temptation to spend it immediately or isn't too much of a temptation for someone else in the home to spend it immediately. And so keeping cash kind of wherever you feel like is safe and out of sight
I know people who literally keep it in their sock drawer, or my preferred option is to keep it in a bag where the rest of your disaster preparedness stuff is. So for instance, where I live, tornadoes are the main thing.
threat in our area and so that's sort of what we are most prepared for in the basement where we would go to shelter in the event of a tornado we have a bag with a change of clothes it's got a little cash it's got our bills and statements in it and a couple other things but kind of the things that we would want close at hand immediately after a disaster and for us that's a really good place to keep it but really wherever is safe and won't be a temptation and as for how much the minimum amount i would say that you really want to shoot for but again you don't have to be perfect
is enough to refill your fridge and to fill your gas tanks, assuming your car or cars are on empty. Okay.
We talked earlier in this series about home insurance and making sure that you're as covered as possible for an event that could potentially wipe out your housing. But are there other insurance options that listeners should be looking into?
So we don't necessarily specialize in insurance, but the one thing that I would say to make sure that they're looking at is not all types of disaster insurance that you might need are necessarily part of just a standard homeowner's insurance policy. So flood insurance is a separate insurance plan.
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