As you collect W2s, 1099s and other tax documents, take a few extra steps to prepare an emergency financial first-aid kit. You never know when a pandemic, blackout, superstorm, fire or cyberattack will come.
The waterproof kit should contain essential documents you will need to reconstruct your financial life after a disaster — and also to help you get through one.
“Some docs you’ll need right away, and others you might not need right away but are difficult to replace,” said Neal Stern, a certified public accountant. “Some you have to have the original; some, a copy will suffice.”
Keep originals of identification: driver’s and marriage licenses, birth certificates, passports and Social Security cards, he said.
After a disaster, you may have to re-establish your ID, replace credit cards, complete a change-of-address form or apply for government assistance. Copies of those items could be kept in a secure cloud storage service, he added.
“If you can’t document who you are, it’ll be hard to get help,” said Stern, who is a member of the AICPA National CPA Financial Literacy Commission.
When people do get prepared for a disaster, said Jim Judge, a member of the American Red Cross Scientific Advisory Council, “oftentimes the financial side is not what people pay attention to.”
Judge keeps his important documents in a small plastic bin under his bed. He also stores money. “Cash is king,” he said, especially if the power is out and ATMs are not working.
Adam Levin, the ex-director of the New Jersey Division of Consumer Affairs who lost a house to Superstorm Sandy, recommended also creating a digital file of documents.
He suggests keeping digital copies of key financial documents on an encrypted waterproof USB flash drive. “If your bug-out kit gets into the wrong hands, it could be a nightmare,” he cautioned.
Adapted from the New York Post.