Financial Recovery After Disaster: My Finances

The University of Minnesota Extension
and North Dakota State University Extension Service have developed Recovery After Disaster: The Familiy Financial Toolkit to assist in financial recovery from
disaster the toolkit is free and available at
this website in a perfect world we would be prepared
for disaster but we know that this is not always the
case this video series has been developed to assist in the
immediate need for financial recovery information following a disaster the six videos in this series will
identify important financial considerations for your disaster
recovery financially recovering after a disaster
is like putting together a picture puzzle first you must identify the puzzle
pieces your current or post-disaster financial picture the more
pieces you identify the easier it is to find the next pieces
so the more you know about your current financial situation the easier it will be to figure out what
you need as you work toward financial recovery in this video we will discuss the five
steps to assessing your current financial situation to help you make the best decisions for
your personal financial situation 1-assess your monthly income and
expenses 2- determine your net worth 3- determine whether or not you can
afford another payment 4- review your credit report 5-summarize your current financial
situation. Step 1: assess your monthly income and expenses
assessing your monthly income and expenses by completing a monthly spending and
savings plan or budget is one useful tool to help families
determine what actions to take following a natural disaster this tool
available in the family financial tool kit will help you understand your income and
expenses prior to the disaster and estimate what they will be post-disaster
it will help you track your income and expenses for the next three months and make adjustments to your budget as
needed this process will help insure your adequately informed as you make
important decisions affecting your financial resources Well, we encourage survivors to talk with
case managers, a long-term Care Committee, a
representative, as well as their financial professionals, their bankers, or credit union
representatives to help them look at their situation and look at all the options available
and to make the best decisions for themselves also as folks are making
decisions about rebuilding their home, repairing
their home, should they move, when you’re considering all these
options it’s so very important to look at the big picture and look down the road will you be able
to sustain those decisions in a year, in two years, three years, because you
really wanna make the best decision for you and your family there are people out there who are ready
and willing to help you make those decisions and to make the right
decisions and to to make sure you’ll be taken care of as
you go forward in this you know where to focus your energies to
focus your financial resources it’s a horrible thing but you certainly learn a lot from the
process oftentimes materials needed to make
these decisions have been lost in the disaster
information to recover these documents is available in the family financial
toolkit because you will be needing those documents as you apply for recovery assistance and down the road so
make a list or what type of documents you have lost
through the disaster and take the steps necessary to replace
those. Step 2- determine your net worth knowing your
net worth will help you determine your financial options or strategies a net worth statement is a
snapshot of the current value of your financial holdings it is calculated by subtracting the
value of your liabilities from your assets, a worksheet to help you
determine your net worth is provided in unit 5 of the family
financial toolkit knowing your net worth is great in terms
of just kind of a snapshot of your financial health and it’s another great thing to discuss track
over time but in terms of using that to make recovery decisions
it really leads to kinda knowing what your options are and
identifying those options start to build apicture of what
can I do in a post recovery situation what can I
potentially liquidate and so having a clear picture of that
really just leads to options and what what your options are
and knowing those options in comparison to
what your other options are that’s really where you can make a
cost-benefit analysis of these various options and really figure
what’s gonna work specifically for you and your unique situation Step 3: determine
whether or not you can afford another payment before you decide to take on another
payment to pay for disaster recovery ask yourself can I afford another
payment comparing your debt to income ratio to
what financial professionals consider an affordable amount of debt will identify another piece of your post
disaster financial puzzle when used with the other assessment
tools you will have a better understanding of the big picture of your post disaster financial
situation it will better prepare you to determine which actions to explore and what financial
options are available the worksheet to help you determine if
you can afford another payment is available in unit 5 of the family
financial toolkit they take a look at that number and
sometimes I feel consumers might think that well if they offer me a loan then but I must
be able to afford it but that’s not necessarily the case
again it’s only an indicator of one’s ability to afford payments it’s
important to know where your debt to income ratio where that lies in conjunction with what you’re spending
plan looks like you know having those two pieces of information together is
going to be really a really good way to make lending
decisions whether or not you want to take on new debt I guess the moral is that
even if they say you’re qualified for its also important to know that
that doesn’t necessarily mean that that you can afford it before you jump into taking on another
mortgage or taking on other loans to repair or rebuild your home make sure that
fits into your big plan because it can be dangerous if you commit to additional debts and you’re not able to
sustain those in the future we had to take a look at what we’re
bringing in every month between a husband and wife working full time in
what our expenses were before the disaster so what we sat down as we
figured out maximum what can we afford to do in terms of more loans. What we did
is we actually walked through some of those worksheets that were provided by
NDSU sat down and figured out okay so here’s
where bills were before here’s what we’re projecting for our new
expenses with those loans and that helped us decide which loans we
could take what our maximum expenditures were going to be and then basically even at all out from
that point and it really is difficult to basically say
okay for a second mortgage we’re gonna have to cut back here here
and here here’s what we can afford to do here’s
what we’re gonna have to do in our own step 4: review your credit report if your financial records have been
destroyed in the disaster it is often hard to assess your current
financial situation and properly plan for your future credit
reports can help by filling in some of the missing
information about your financial obligations a credit report will give you a current
snapshot or your financial information including
mortgage car payments and revolving accounts such
as credit cards order your free credit report by
visiting the website calling toll-free or by writing in from
just kind of getting a sense and what’s out there what’s reporting out there for
you in terms of your credit obligations all
that will be will be reflected on there it’s also
a great tool to see if there’s any discrepancies but the big thing is in terms of making
recovery decisions and specifically making recovery
decisions regarding you know possibly lending you know that
credit report is going to be something that a lenders gonna take into account when they’re making a decision
whether not to to potentially lend to somebody that
might be in need of a loan step 5: summarize your current financial
situation financial situations are often complex
following a disaster it is natural and normal to experience a
range of emotions when determining your overall financial
situation ranging from surprise regret relief disappointment anger anxiousness or excitement knowing the
big picture of your financial situation will help you make the best decisions
for your situation and possibly speed your recovery from disaster with this knowledge in hand you can
determine whether you have enough resources for recovery or whether you will need to access
disaster resources it may be beneficial to seek help from a
financial professional as you make decisions when you put
all those pieces together it gives you that you know the road map
of sorts that one would use to navigate
some uncertain times one of the things that I often find myself saying when I’m working with our members that
are in distress and in trying to develop a plan is if we can make it look
good on paper we have a chance to make it look in
reality if can’t make it look good on paper there’s no way that we’re gonna
magically make it look good in reality and that’s where pulling all those things
together to know you know what those steps are gonnabe is really important and it’s all
those different pieces you know like looking at your net worth and like
looking at your debt to income ratio you start to generate a picture what your
options are in the last few minutes we have heard
about the steps to take to determine your current post-disaster financial situation 1- assessing your monthly income and
expenses allows you to know what resources you have to work with and what financial commitments you have
2- determining your net worth allows you to
get a big picture of your financial situation and will provide valuable information as
you make decisions following the disaster 3-determining
whether or not you can afford another payment is vital as you consider various
resources and options to borrow money to rebuild 4- reviewing your credit report can
provide helpful information if any paperwork was lost during the disaster and can inform future decisions 5- summarizing your current financial
situation will again provide you an overall picture of your current
financial situation and be helpful as you strive to make the
best decisions for your personal situation it is
important to recognize that your life will never be exactly the same as it was
what do you want your new reality to look like we encourage you to view all the
financial recovery after disaster videos the family financial tool kit and other
materials at this website

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