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When disaster strikes, your finances will probably be impacted. How badly depends on exactly what happens to you and your property. But you can prepare and try to cope as best as possible when it happens.

I got thinking on this topic while watching the California wildfires from my mother’s house. Yes, I had to evacuate due to one of them. Fortunately, I got to come home to a home that is still here. Feeling pretty lucky.

Of course, when you lose your home and/or job due to a disaster the financial impact is huge, often overwhelming. Just how bad it is can depend on things like whether or not you have sufficient insurance to rebuild, and how possible it is to find work if your place of employment burned. These are real things people have to deal with.

Buying homeowners insurance is one of the things you should do if you own a home, so that you can rebuild after a disaster. It’s harder to get in some places than in others, but if it’s in the budget, potentially very much worth the money. You won’t know until you need it desperately.

But even just having to evacuate and come home a few days later can have a huge impact. Just think about all the people who are paid hourly. I know a lot of businesses closed for the duration, or employees chose not to come in due to the stresses of evacuating. Kind of makes childcare hard to obtain, after all. But that can be a huge financial hit.

These are the times where having something of a savings account comes in handy. If not that, then emergency credit cards, so that a lack of money coming in doesn’t instantly ruin you. Whenever possible you need some sort of backup plan for these difficult times.

Let me tell you, even my mother felt something of a financial impact, albeit at her choice. She was feeding 11 people at her home, 9 of which had been evacuated from their homes. Those groceries weren’t cheap, although various people did contribute financially to them. Mom still took the brunt of it, deliberately. You can be impacted by a disaster even if it doesn’t come directly to your home or work.

The bottom line is to always think about what might happen, and be prepared for that which it is reasonable to prepare for. Think about how you and your family will get by during an emergency. Take the time to plan for it and you will have a better chance of coping well financially, so you can recover sooner.

Technorati Tags: personal finance, disaster, disaster planning, california wildfires

We all know we should save for a rainy day. Money problems can happen to anyone, no matter how stable their life appears.

And sometimes the troubles just keep on coming, beyond what you had saved up for them. What then?

What you do depends on how bad it gets. Sometimes things are bad enough that bankruptcy is your only answer. Given how much more difficult that has been made in recent years you’re best off trying to avoid it, but there are times that it is the only option that will get you out of financial trouble.

But whether or not bankruptcy is your answer, you will need to rethink your current financial plans.

Cut Back 

Take a look at your current spending habits. If things have been bad a while, hopefully you have long since started cutting back on luxuries. If not, get going on that, and yes, cable television and even internet access can be considered luxuries.

Look at where you live. Can you really afford it now? It may be a good time to move to a smaller home or apartment, and use the extra money to help with the bills that are giving you so much trouble.

What about your job? Is it really enough? Do you have the skills to get something better? What about the time to take on a second job to help make ends meet. Even if it’s flipping burgers, a second job will help.

Where do you shop? If times are tights, now is not the time to try to keep up with current fashions. When you absolutely need more clothes, thrift and resale shops are generally better choices than department and specialty shops. Just look around and find out which ones in your area tend to have the best selection.

Work on Your Debts

But of course spending less money only does so much good if you aren’t getting rid of your debts.

Start by talking to creditors and seeing what can be arranged. If smaller payments can be permitted it will extend the life of the debts but help keep you from falling behind completely. Ask for lower interest rates too. It could happen.

Pick a debt and focus on paying it off, paying just the minimum on the rest. Once it’s gone, that’s one less bill to worry about. Pick another and do it again. Repeat as necessary.

Technorati Tags: saving for a rainy day, debts, personal finance, debt, credit, money

You get a phone call about your credit card. It’s your credit card issuer, and they’re checking up on your account. Maybe there’s a transaction they want confirmed.

Is it really them, or is it a scam?

It can be hard to tell. Credit card companies do sometimes call when there has been unusual activity on your account. In my experience, this is an automated call rather than a human.

However if you get a call from someone saying they think that there has been fraudulent activity on your account what do you do? Do you give them the information they ask for? Even if it’s that little 3 digit code on the back of your card because they say they want proof you still have the card in your possession?

I wouldn’t recommend it. That little number is the final piece of information scammers need to do online transactions with your credit card at many websites.

If you get a call like this, the best thing you can do is say you will call the company back, look up their phone number either online or on your bill, and call them yourself. Once you have initiated contact, you know you are talking to a legitimate person, and they can tell you whether or not the first call was legitimate.

If it was not, then you know you should be concerned about whether or not someone has gotten your credit card number. Talk to the agent you called about the call you received. They will be able to help you decide what to do about it.

Technorati Tags: credit card scam

The holiday season is fast approaching. Many stores already have Halloween, Thanksgiving and Christmas decorations up and available for purchase.

And for many, ’tis the season for overspending.

I know it’s a lot of fun to be generous to those you love. Giving gifts at this time of year is one of the ways many people show how much they care for their loved ones.

But if you don’t have the money, don’t go overboard.

Remember that it is more important to show that you care for your family than to just give them things. If money’s tight, offer time together instead. The time may well be more treasured than what you would get for overspending in any case.

For older relatives, there’s the time you can spend with them. Promise to help run errands, cook meals or just visit more. The time spent will be like a gift to both of you.

Children may not notice as much how valuable time is when you give them the gift, but you can give them things that they will enjoy year-round. Think about annual passes to local attractions, for example. Theme parks. Go Card USA offers discounts on local attractions, and you can buy Six Flags tickets online.

When you buy gifts, do think of what you can afford. Popular it may be to have a ton of presents under the tree, but how many are really appreciated? How many will still be in use the following Christmas?

Don’t be one of the many people who loads up the credit cards so heavily at Christmas that you have trouble paying your bills later on. There are more important things.

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If you’re carrying a large load of debt, especially if it comes from high interest rate sources such as credit cards, you know how painful it is to pay so much for the money you owe. Sometimes it can even spiral out of control, to where you cannot pay your minimum payments, never mind actually paying them off anytime soon.

And that, in a nutshell is the first harm that carrying debt can do. If it gets out of control, your life can feel like it is out of control. But there’s much more that carrying excess debt can do.

It lowers your credit score

A part of your credit score relates to how much of your available credit you are actually using. If it’s out of proportion, your score goes down. And your credit score determines the APR you get on things that you really have to have credit for, such as buying a car or a home.

It’s hard on the budget

Just think of how much more money you would have to use or to save if you weren’t paying off debts. For many people this is several hundred dollars a month. Wouldn’t you rather be able to use that money for something you want now? Or to be able to save it for retirement or a rainy day?

It makes you miserable

Too much debt is strongly related to being unhappy in your life. It’s stressful.

When is credit and debt appropriate?

All that said, there are times when debt is appropriate. Buying a house or a car, as I said above. But to get the best rates you do need something of a credit history.

This is where a well-managed credit card comes in very handy. Use it. But pay it off or carry the smallest balance you need to at the moment. Don’t overload it. Don’t apply for every single credit card or store card you hear about.

Debt can serve a purpose, but misused it can destroy your life. As much as your personal circumstances allow, don’t let it take your life over.

Technorati Tags: debt, credit, personal finance, credit card