Resilience Starts with Financial Preparedness
December 18, 2018
Disasters and emergencies happen often with little or no warning – whether it is a fire in your house or a massive hurricane, the unexpected can take a toll on your financial planning. Being financially prepared helps disaster survivors to bounce back much more quickly from a disaster, yet research by the Federal Reserve shows that about 40 percent of Americans don’t have money to cover basic needs for more than three months.
Recognizing these gaps, FEMA is encouraging the entire nation to be involved in creating a culture of preparedness, which includes financial preparedness. To help us move toward that vision, we are pleased to partner with the Association for Financial Counseling & Planning Education® (AFCPE®) on direct efforts to improve financial preparedness for individuals and families. To this end, FEMA and the AFCPE® are working together to develop a training program for financial professionals that will help them to prepare their clients for emergencies. Setting up a small savings account to set aside money every month will be useful in any kind of emergency.
Beyond this, FEMA and AFCPE® will be focusing financial readiness through tools and educational efforts aimed at helping individuals, families, and businesses understand their financial risk and be more prepared for incidents through savings and insurance. Recovering from a disaster relies heavily on preparing beforehand and having adequate emergency funds as well as money on hand.
The partnership is the latest of several efforts underway to increase financial preparedness within the United States. In partnership with Operation HOPE, we developed the Emergency Financial First Aid Kit (EFFAK). It’s a toolkit that helps individuals and families organize critical financial, medical, and household information and includes a checklist of important documents and forms to help compile information.
As part of Financial Capability Month this past April, FEMA, in partnership with the Financial Literacy and Education Commission, led a public social media campaign that reached 28 million people. We offered tips and resources to improve their financial future. As a result, orders for the Emergency Financial First Aid Kit doubled, and it’s the most requested item in our FEMA library. The timing is right and people are interested in improving their financial future.
Any kind of emergency can put stress on our financial situation. Whether it’s a broken down car or a major natural disaster, these events can wreak havoc on our savings. FEMA wants to help communities across the country to prepare for those scenarios and is proud to partner with AFCPE® to build financial preparedness for all. As a nation, the more financially prepared we are, the more resilient we will be in the face of disasters. Emergencies happen, but we don’t have to be caught unprepared.
Guest Contributor: Carlos J. Castillo, Associate Administrator for Resilience, Federal Emergency Management Agency (FEMA)