DON’T GET CAUGHT OFF GUARD FINANCIALLY WITH A HURRICANE THREAT! BUDGET CONSIDERATIONS FOR YOUR HURRICANE FUND!
Hurricane season for the Atlantic coast hits every year on June 1st and runs through November 30th. We, as residence of the Atlantic boarding states and the coastline of the Gulf of Mexico, pray every year for a light season and minimal impact. The truth of it is though, every year there are on average 16 named storms 7 of which are at hurricane status and 3 of those are considered major threats as a category 3 or above according to the (ncdc.noaa.gov, Hurricane & Tropical Storms: State of Climate information site 2002-2018). All of which have the potential to be a threat to some part of the Atlantic and Gulf of Mexico coasts. Now, I am not a hurricane statistician; I only use this basic information to point out that hurricane threats are a part of every coastal residence annual concerns. Being prepared financially is an important part of your over all household budget and should be taken seriously and with conviction.
So how do you prepare for hurricane spending in a budget that is already taxed?
Just the other evening I was sitting at a restaurant in Deadwood, SD having a drink and talking to some of the people there about how mindset affects income and I recognized how passionate I am about the subject. I was smiling, confident, firm, expressive, and alive when I spoke about it. Being able to see between the lines allows me to help others see their own belief blocks which allows for contemplation and shifts. I Love Talking about mindset and money and it showed in these conversations.
You must make it a priority! Think about how much you spent during Dorian. How much of that spending went on credit cards, where you now have to make monthly payments, not to mention the additional cost of interest upwards of 24+% per card. You have the money, you just have to commit and allocate to the fund every single month until you hit your estimated needs amount. This fund is in addition to your emergency fund for monthly expenses in the event you actually have severe damage and cannot work for a while. This fund is for Hurricane preparation and riding out the storm.
1. Protecting Your Home – These costs are typically things we do not save for, and scrounge around furiously to purchase at the last minute before a storm hits.
Considerations we use in determining whether to spend or not to spend is usually because we do not have the money to spend and/or whether the uncertainty of the
storm is worth the spend. Three possible categories for you to fit into:
● Category A – You have hurricane shutters for your home. I would recommend in January to do an annual review of your equipment and tools needed to put them up
● Do you have all the shutters you need?
1. Yes – then no further estimate needed here.
2. No – then start calling around for estimates on ordering those individual pieces and an estimated shipping time. You want to give yourself time to save for them, plenty of time to order them and receive them long before hurricane season starts. Prices are impacted seasonally, and you want to be sure to get the best price during a time where you have time to give for receiving them.
● Do you have enough nuts/bolts/screws needed to put them up without additional stress?
1. Yes – make sure they all fit properly and make sure all the holes or receiving bolts are in good condition for use.
2. No – Get an estimate for enough to cover the amount missing plus extras for just in case.
● Do your tools work and are they easy to find, use, and get to?
1. Yes – Make sure your batteries are charged and in good working order.
2. No – Make a quick list of what you need and get an estimate for purchasing if needed.
● Do you need to hire help? Hired help may or may not have the tools they need to do the job. Price gouging during a panic phase of hurricane preparation can also affect your funds.
1. Yes – try to line up help you can rely on long before the season hit. Agree to a price and then add 10% for possible changes in availability. Ask them if they have tools or will need to use yours.
2. No – No further estimate is needed here.
● Category B – You do not have hurricane shutters, impact windows, or other protection and usually board up with plywood
● During your annual budget review, I recommend you create an estimate of what it would take to protect your home as it is today.
● This is how:
1. Make a list of supplies you would need and then estimate the cost to purchase everything on the list.
● Plywood – how many sheets to cover the entire house
● Screw and/or tap cons – to hold the plywood in place
● Tools needed – if you do not already have any
● Any other supply specifically needed for your home
2. Do you need to hire help? Hired help may or may not have the tools they need to do the job. Price gouging during a panic phase of hurricane preparation can also affect your funds.
● Yes- try to line up help you can rely on long before the season hits. Agree to a price and then add 10% for possible changes in availability. Ask them if they have tools or will need to use yours.
● No – No further estimate is needed here.
Once your list and estimated costs are calculated add 10% for unexpected additional needs.
● Category C – You have hurricane impact windows. I would recommend double checking with your window company to see if you need to do any further protection. Do not assume you are safe.
2. Automobile and/or Generator Needs
● Fuel for both – estimate how much fuel you would need to:
1- Fill up all your automobiles
2-Run your generator for a minimum of 72 hours – if you are really a prepared person you can use the estimate for one or two weeks.
● Maintenance for both
1- Automobiles should be a separate budget item already being managed
2- Generator maintenance – annually during your budget review cycle, you should look at your generator and estimate the cost of maintenance and/or repairs for this new season. Give yourself time to save for it but do not wait until you are in the middle of a preparation crisis to do the service. I recommend for your first cycle getting your estimates in December or January for the new year and plan on all services to be done in May. This will give you 5 or 6 months to save and then you can expand to 12 months with a maintenance cycle of May every year.
3. Hurricane Kit Supplies – There are so many great resources giving you lists of items to include in your Hurricane Supply Kit. Find one that fits your needs and then you can use amazon as a way to get an estimate on what it will cost to fill the kit. I would even go so far as recommending you create a specified list for future purchase. You don’t want to buy everything all at once unless you have the cash to pay for it but adding this total to your fund will ensure you are ready when it is time to purchase them.
4. Groceries – Food is the one thing being purchased where there really is no control over what goes into our carts. I don’t know about you, but I certainly tend to eat everything in the house when there is anticipation of not having enough. I, all of a sudden, crave every kind of junk food there is, and it is usually gone before the storm even gets in the danger zone. Kids and teenagers eat a ton when they are bored and stuck in the house. So, how do you plan for a food budget during such events.
● Determine how many people you are likely to be feeding during the span of the storm, the time you are actual stuck home during warnings and the storm, and for a minimum of three days after the storm. I would use an average of $100 per person for seven days of food. There are many theories on what it should cost to eat but you know your family best. If $100 is too much lower it to a level you believe fits, if it is too low, raise it to fit. The idea is to have enough in your fund to cover the extra eating expenses that happen during a time of anxiety, boredom, and need. Alcohol should be built into this number as well.
● Determine if you like to host social events during the storm – estimate how much you would normally spend on a cookout or gathering and use it as your estimate.
● Add an extra $100 for water supplies. You won’t use it all but again, the idea is to be prepared.
5. Pet Supplies – Use the amount you usually spend per month here. It is okay if it is a little high. Having a bigger cushion of cash is better than having a shortfall at times of need. Be sure to include prescriptions, food, and boarding needs in this estimate.
The good news with this item is when you purchase it during an event you now have enough to cover the next months cost so you can put that money right back into the fund from your next month’s budget.
6. Evacuating – Estimating the cost to evacuate is similar to estimating a vacation. Get an idea of what it would cost to evacuate so you have that option during an emergent situation. Remember that prices tend to be higher in some areas based on demand, locations, seasonal rates, type of hotel you choose to stay in, and other unexplainable factors. When you do this estimate check the rates for prime hurricane season and no notice for takeoff. This strategy usually gets you close to the expected figure to save for.
Take into consideration the following:
● If driving somewhere:
2- Tolls (if not lifted)
4- Dining out
● If flying somewhere:
2- Car Rental
5- Dining Out
7. Anything else you think you need for preparation.
Something to remember when you are coming up with your estimated budget. If you are evacuating, you do not need groceries, but you would still need to protect your home. If you have been purchasing your supply kit content in pieces throughout the year, then you have extra for replenishing it when needed. The final number you come up with is your target for this fund. I recommend putting the funds into a bank that is not easy to access and giving it the nickname “Hurricane Fund.”
The great news is when you have reached your fund goal the allocation can be moved to another fund. When you have to use anything out of the fund you simply take the amount spent and divide it by the number of months you have to get the fund back to its full balance and that is your new allocation amount. The important thing to remember is, do not use this fund for anything else. Do not touch it except for hurricane purposes.
This fund is not the after-math fund. Hopefully you have all your other financial needs in place covering your health, home, and other personal assets. I would recommend you going through the process shown here (https://www.ready.gov/financial-preparedness) to ensure you have everything you need after a storm.
There are so many emotions that show up in this type of spending. You don’t want to be fighting those emotions or your loved ones during a hurricane scare. Have a plan in place and the money budgeted to cover the costs of that plan. The result will be
reduced stress, less fighting, and reduced financial impact.
Connection, protection, and care are the most important things to keep in mind during a fear filled event such as a hurricane threat. Let me help you!
You can download my simple “Estimate Your Hurricane Fund” worksheet to start your preparation. Getting the figures you need will take some effort on your part but you are welcome to email me at (email@example.com) with any questions.
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