Tue 25 Jul 2006
Financial Disaster Readiness – Local Disaster
Posted by RichSlick under Financial Safety
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Scenario 1 – Localized disaster that impact you directly and personally (e.g. Hurricanes, Earthquakes, Tornados, Terrorist attack)
When Hurricane Katrina wiped out New Orleans, I was personally involved with the human recovery efforts in trying to help evacuees find housing, jobs, money, etc. I am still haunted by the desperation of so many and the failure of government to act quickly, decisively and effectively. I was even more troubled by Hurricane Rita and the problems that caused: ATMs ran out of money, Gas stations ran out of gas, grocers ran out of food, traffic tied for 10+ hours.
So what happens during a disaster?
- You will need food/water/clothing
- You will need shelter
- You will need transportation
- You will need money to accomplish 1, 2, and 3 for at least 10 days
So you’ve been prudent and you’ve saved $1000 in that emergency fund for a rainy day like this and you’ve been smart about it and have it earning 5% over at but you need the money now so how do you get it?
During Hurricane Katrina, every ATM in the greater area was either empty or not working but even if the ATMs had some cash how easily would you pull money out of that emergency fund?
This is where being a little more prudent with your bank selection comes in handy. If you opened an account at , you’d be earning that same 5% yield but you’d also have an ATM card which provides easy instant access to your funds. The alternative is an electronic transfer from Emigrant to your checking/ATM account but those transfers usually take 3 to 5 days if not longer. During both hurricanes however, electricity, internet access, telecommunications, and offices were all unavailable for a period of time compounding the problem.
I had intended on providing some details on preparedness but these links do a much better job. I will only comment that it is of paramount importance that you have access to CASH & credit cards during a disaster. Credit cards are best used to book hotels, rent cars, and buy emergency supplies. Cash is needed if the credit card network is down due to power outage, telecomm outage, etc. I would recommend at least $1000 in cash funds.