April is Financial Literacy Month in Pennsylvania.
Just like going to the doctor every year for a checkup, a yearly financial checkup is helpful to make sure you’re prepared for emergencies. In recent news, we’ve seen tornados ravage the south, blizzards on the West Coast, forest fires, floods, etc.
Emergencies can thrust you into a financial tailspin. Having a plan can help ease the pain and stress.
What should be involved in a financial checkup?
Complete your annual financial checkup
- Checking your credit reports annually. Go to AnnualCreditReport.com to order your free reports. Making sure these are accurate can help you in the event you need new credit.
- Get your personal insurance history from LexisNexis and Versik. These reports can show your claim history for personal property and cars. If you are experiencing a disaster, it is good to know if these are up-to-date and there hasn’t been insurance fraud.
- Check your employment history for accuracy. This can be done through an Equifax service called Work Number. This could be important if you find yourself looking for housing, jobs or even credit.
- Check for negative banking info. ChexSystems.com can tell you if you have any negative information in the banking world, such as outstanding overdraft fees or other account issues. Access to your accounts will be important during emergencies but remember power outages are common in natural disasters, so having cash on hand is a good idea.
- Keep important numbers for your financial institutions and/or advisors in your phone contacts. Having paper documentation with contacts in case of power outages or a phone battery dying can also be helpful.
with help from the Department of Banking and Securities.
Financial industry experts recommend having three to six months of living expenses at any given time.
COVID taught us that many families do not have that amount of cushion. Start where you are, even if that’s $5 per week. Use direct deposit to split paychecks so a small amount goes into an account you don’t see.
If there were to be a disaster and you are displaced from your home or apartment, often emergency shelters are set up, but that can be temporary. What if you need to travel, get a hotel room, pay for meals and your basic living expenses on the road? Thinking ahead and having a safety net can give you peace of mind. Having a credit card with room for expenses can be helpful.
If you own your home, knowing the value of your home and all the contents is important to make sure you have proper insurance coverage. Taking an inventory yearly can help you adjust the value of your property. Your insurance agent can assist with this.