Name a potential disaster, she's got a financial plan
Posted
Jul 28 2008, 05:07 PM
by
Karen Datko
Rating:
An article in The New York Times about more Americans than ever living on the verge of financial ruin got "Frugal Zeitgeist" thinking about her own contingency planning for disasters. If a terrorist attack, a catastrophic illness or job loss struck, would she survive financially?
This blogger does have a plan -- in fact, several -- and she is worth listening to. She's so financially disciplined that she just paid off the mortgage on her New York City apartment and did it in less than seven years (although some would argue that's not always the best way to use extra money).
With hurricane season, severe weather in the heartland and California wildfires in the news, hopefully more people are inclined to have plans in case of natural disasters. The same should apply to other situations beyond your control.
It's one thing to have a stash of cash in case the power goes out and all of the ATMs stop working for a week or a month. But what if your job disappears?
Frugal Zeitgeist has previously asked herself this question: "If one crisis can bring you to your knees, what can you do to protect yourself?" She also came up with answers, and continues to revise her plans. She added, "This was a helpful tool to have when I was watching the World Trade Center burn on 9/11."
Her post deals with a number of catastrophes. We'll list a few of them here:
In case of terrorist attack or natural disaster: Have adequate homeowners insurance, a fully charged flashlight and water, and be fit, in case she has to walk out of town. A shortfall that she identifies in her plan is not carrying enough cash. We'll add another consideration: Many insurers no longer cover damage from terrorist attacks, and garden-variety homeowners insurance doesn't help in the event of several types of natural disasters.
Her plan for catastrophic illness: Keep fit, don't overeat, and see the dentist regularly. Have good health, disability and long-term care insurance.
Her overall plan to remain financially fit: Have no consumer debt, maintain an emergency fund, and save for the future "so that I have the maximum flexibility possible at all times."
