American Consumer Credit Counseling Announces Tips on How to Disaster-Proof Your Finances

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National nonprofit advises consumers on how to prepare for the unexpected and to avoid long-term financial ruin.

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We all hope that the direst emergency we experience is a major car repair, a busted hot water heater, or a hole in the roof. But planning for even the most routine types of expenses is the right step to also be prepared for what you least expect.

Natural disasters can occur at any time in any place. Whether it’s a hurricane, earthquake, tsunami, fire, or something in between, the results can be overwhelming. That’s why national nonprofit American Consumer Credit Counseling encourages consumers to prepare for the unexpected – not just by stocking up on flashlights, batteries and bottled water, but also by disaster-proofing your finances.

Within the past year, the United States experienced its fair share of the unexpected and unthinkable – from devastating explosions at a Texas fertilizer plant to the terrorist bombings of the Boston Marathon to the tornadoes that ripped through the Midwest and crippled entire communities. Victims of these disastrous events suddenly found themselves severely impacted financially without an emergency fund to save them.

“Natural disasters have a destructive and long-lasting impact on consumers no matter what their financial situation may be,” stated Steve Trumble, president and CEO of American Consumer Credit Counseling. “By actively preparing for these occurrences, consumers can insure that the financial damage will not create setbacks that will take years to overcome.”

ACCC states that the best defense mechanism and readiness tool to stave off a financial downfall is a household fund established specifically for emergencies and unplanned events that equals six to nine months’ worth of critical living expenses. Critical living expenses include those bills which you cannot defer without serious consequences or complications such as housing payments, food, utilities, insurance, transportation, child care and minimum payments on loans or other credit.

Building this fund can be difficult for many Americans strapped by debt and living expenses. ACCC suggests making this fund a top priority for savings in addition to a personal retirement fund. Once you add up the cost of your basic monthly expenses, formalize an amount to save from each paycheck (10 percent is recommended) to deposit in your household emergency fund.

“If you find yourself living paycheck to paycheck like most Americans, stripping down your emergency fund to only the fundamental necessities will still prevent a financial downfall in the case of an unexpected event,” added Trumble. “An untouchable account that can keep the roof over your head, food on the table and the lights on will build a foundation for a financially safe future.”

According to ACCC it might not be feasible to put away a percentage of your paycheck each week, but even putting away small contributions adds up quickly. Consider limiting your weekly coffee fund and transferring that $5, $10 or $20 into a savings account. Rather than cutting back, translate a talent or passion into a second job such as cleaning houses, babysitting, tutoring, dog walking or blogging to build up your financial cushion.

In addition to an emergency fund, American Consumer Credit Counseling also offers the following tips to disaster-proof your finances for the unpredictable:

  •     Take a home inventory. Go room by room and create a detailed inventory of all of your possessions by writing down or taking photos and videos of furniture, electronics, jewelry, appliances, art and other valuables. Update this inventory regularly and keep it in a safe place such as an online storage service such as Dropbox.
  •     Verify your insurance coverage. Review your homeowners or renters insurance to see what is covered and make sure that your coverage amounts are keeping up with inflation.
  •     Store original papers in a safe deposit box at your bank. Copies of these irreplaceable documents, such as deeds and birth certificates, should be kept in a water and fire-proof box at your home along with the key to the deposit box, some cash, a list of emergency contacts, and important financial and medical papers.

“We all hope that the direst emergency we experience is a major car repair, a busted hot water heater, or a hole in the roof,” said Trumble. “But planning for even the most routine types of expenses is the right step to also be prepared for what you least expect.” Check out all these tips and more online.

ACCC is a 501(c)3 organization, that provides credit counseling, bankruptcy counseling, and housing counseling to consumers nationwide in need of financial literacy education and money management. For more information, contact ACCC:

  •      For credit counseling, call 800-769-3571
  •      For bankruptcy counseling. call 866-826-6924
  •      For housing counseling, call 866-826-7180
  •      Or visit us online at ConsumerCredit.com

About American Consumer Credit Counseling
American Consumer Credit Counseling (ACCC) is a non-profit 501(c)(3) organization dedicated to empowering consumers to achieve financial health through education, counseling, and debt management. ACCC provides individuals with practical solutions for solving financial problems and recognizes that consumers’ financial difficulties are often not the result of poor spending habits, but more frequently from extenuating circumstances beyond their control. As one of the nation’s leading providers of financial education and credit counseling services, ACCC works with consumers to help them with the best plan of action to reduce their debt and regain financial stability. ACCC is accredited by the Better Business Bureau and holds an A+ rating. It is also a member of the Association of Independent Consumer Credit Counseling Agencies. For more information or to access free financial education resources log on to ConsumerCredit.com or visit TalkingCentsBlog.com.

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