How to Keep Your Financial
and Personal Records Safe

By Douglas Charney

Hurricanes, floods, fires, terrorist attacks…the list of possible disasters is endless. Should something catastrophic and unforeseen happen to your home, are your financial records and personal information safe? For most people, the answer is “no.”

Think about all the things you could lose in something as common as a house fire: Your tax returns, your passport, your birth certificate, your computer, your check book, your bank statements, your credit cards, your insurance paperwork, and even your cash. But without all these things, how will pay your bills, buy food and clothing, or even rebuild your finances and your life?

While no one wants to believe that disaster will happen to them, your odds are actually higher than you think. According to the National Safety Council, the average person has a 1 in 1,167 chance of being involved in a fire, and a 1 in 3,421 chance of being involved in some sort of natural disaster, such as an earthquake, flood, hurricane, etc. Therefore, if you’ve always believed that something bad will never happen to you, it’s time to think again.

So how do you protect your personal and financial information from natural disasters, home fires, or even terrorist attacks? The answer is by disaster-proofing your personal finances before a disaster strikes. Here are 10 sure-fire ways to keep your financial and personal information safe.

1. Purchase a home safe: Every household needs a home safe that can withstand temperatures up to 1700 degrees. Keep the safe bolted to the floor in your basement or on the ground floor level so it doesn’t fall through the floor during a fire or get carried off by burglars.

2. Open a safety deposit box at an out-of-town bank: Many people who have a safety deposit box simply use one at their local neighborhood bank. A better approach is to use a bank that’s out-of-town. This way if a disaster strikes that affects your entire town or city, such as a flood, your safety deposit box has a lower chance of being affected by the same disaster. Since many banks offer free or reduced fees on safety deposit boxes for their current customers, you can use the same bank that holds your accounts, just a different out-of-town branch.

3. Create a financial disaster kit: Gather all the documents you keep in your home safe, wallet, and safety deposit box and make two photocopies of everything. Include all the account numbers of your credit cards, bank accounts, retirement accounts, insurance policies, and brokerage accounts. Also include any work-related items, such as pay stubs and employee benefit information. Keep one copy of these papers in your home safe, and keep the other copy in your safety deposit box. By having this information in multiple safe places, you can have quick access to it no matter what happens.

4. Have an emergency cash fund: Save at least three months’ worth of income for emergencies. Realize that you don’t have to save this amount of money overnight. It will take some time for you to accumulate three months’ worth of income. Start small, with perhaps $50 a week, and build the account slowly. Should a disaster happen before you have a full three months’ worth of income saved, remember that some money is better than no money. Make sure you have quick access to these funds via an ATM or debit card, or with checks that are separate from your regular checking account. Keep this ATM card or check book in your financial disaster kit.

5. Keep cash or traveler’s checks on hand: Many people no longer keep cash in their wallet or in their home because of debit and credit cards, which they view as safer. However, should a disaster strike that wipes out electricity and closes the banks, how will you purchase basic necessities? At the very least, have $100 per person in your household available as cash or in the form of traveler’s checks. Keep this money in your home safe. This way you have some immediate funds to hold you over until the power is back on or the banks re-open.

6. Have an emergency credit card: Keep one credit card account empty and save it just for emergency use. Get the bank to issue two credit cards for this account, one in your name and one in your spouse’s name or another family member. Keep one card in your home safe and the other in your safety deposit box. Do not store this card in your wallet. If you do, you may be tempted to use it and won’t have the credit available should you need it during a disaster.

7. Back-up your computer regularly: Since many people claim that they store their entire life on their computer, make sure you back-up your computer every day. You have a number of options for data back-up. Some people prefer to use a CD, USB data stick, or tape drive. In this case, you have to remember to keep the back-up with you or in a safe place. Another option is to use one of the many Internet-based data back-up systems that are available for a monthly fee. This way you don’t have to physically store anything or remember to grab any files. They’re all waiting for you online should you ever need them. Whatever back-up method you choose, practice restoring your back-up so you know what to do should the need arise.

8. Make an inventory of your home furnishings and valuables: This inventory should be in photo or video format. Keep a physical copy of the photos or videos, put a copy on your computer’s hard drive, and keep a back-up copy on CD or DVD and store it either in your home safe or in your safety deposit box. Include copies of purchase receipts for large items, such as televisions, computers, expensive jewelry or artwork, and furniture suites.

9. Review your insurance policies: Pull out your home and auto insurance policies and see if they need any updating. Make sure that your replacement values for your home or cars are not too low. This is also a good time to consider purchasing disability insurance, which will protect you and enable you to generate income should you become disabled during a disaster.

10. Back-up your back-ups: Make a copy of all your financial records, documents, deeds, and your financial disaster kit. Then send this packet of information to a trusted relative or friend who lives in another part of the country. Instruct this person to keep your packet in a safe place, such as a home safe or safety deposit box. This is your final layer of protection, as even if a disaster affects a large geographic area, your information is still safe somewhere else in the country.

Peace of Mind During Stressful Times: While these 10 steps may seem extreme, consider how “stuck” you’d feel if you lost everything and had no proof of your assets, no access to your insurance paperwork, and no money for immediate needs. Realize that protecting your personal and financial information is one the smartest things you can do to prepare for the unexpected. So start implementing these strategies today. You can then rest assured that no matter what happens, you’re one step ahead of the disaster and can rebuild your life quickly and easily.

Provided by courtesy of Douglas Charney, a Senior Vice President-Investments with Wachovia Securities in Harrisburg, PA. For more information, please call him at 888-529-2973. Wachovia Securities, LLC, Member NYSE & SIPC, is a separate nonblank affiliate of Wachovia Corporation. C2007 Wachovia Securities, LLC.

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