The Prepared Home

Financial preparation - the basics

This is a huge subject that we can really only skim over here.

Keeping cash at home

One of the problems that was anticipated with Y2K was that the hole in the wall machine might decide not to hand out any cash for a while. Therefore people were advised to keep some cash at home just in case. We joke of people storing cash under the mattress but my grandfather used to keep a large amount of money hidden in his greenhouse. My dad was given the instructions on how to find it while my grandfather was ill in hospital and could hardly believe his ears.

There is a balance however, you need to keep enough at home for what you believe your immediate needs will be BUT the rest belongs in a bank or building society savings account. A savings account will pay you interest so you will even collect more money.

Insurance

The idea of insurance is that everyone pays a little into a pot and if someone loses the things they have insured, they get a payment from the pot to cover the loss. The problem with insurance is that it seems a waste of money until you need to make a claim on it and then it is a great help getting you back on your feet again.

Imagine losing everything you owned in a fire or losing all your portable electrical equipment during a burglary and having to start again. If you claimed on insurance and got a payment from them it would take the sting out of what happened. Daft as it sounds, there are thousands of people out there who do not have the contents of their home insured and heaven only knows how they would cope if the worst happened.

Getting organised

Being organised can help you avoid all sorts of problems and help you sort out problems that do arise. Sometimes you need to be able to prove that you have made certain payments because mistakes have been made. It is also important to keep track of things if you have taken out a loan that is interest free if it is paid off before a certain date but then reverts to a higher interest rate that that date.

One of the things that older people do as they start thinking of how their family will cope when they have gone is to organise all their financial information. However, there are many sudden and unexpected deaths that occur every year and someone has to sort out their financial affairs. It would be much easier for them if you had all the details of your insurance policies, bank accounts, building society accounts, loans jotted down in one place so that they could be sorted out properly. Mind it would also make it easier for you to keep track of everything as well.

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