How to Prepare Your Wallet for a Disaster

Austin, who occasionally writes here at PT Money, is in his 2nd year of teaching English in western Japan. With the Japan Tsunami fresh on his mind, he generously offered to write a couple of pieces on preparing for major disasters. You can check out his personal finance site for 20-somethings at Foreigner’s Finances.

I teach English in western Japan and was here last month to witness first-hand the carnage that the Tōhoku earthquake and tsunami had on the northeastern coast of Japan.

By now many people have seen the devastating footage of the tsunami reaching mainland with whole houses being ripped from the ground and cars being thrown around like matchboxes. These goods, which people had saved up for for years, were destroyed in minutes.

Japan Tsunami - Man Sifts Through Debris

A man sifts through debris left in the wake of the Tsunami.

The monetary aftermath of this disaster will be a challenge for Japan for decades to come.

If you pay attention to your finances you know that a disaster like the one in Japan can and will wipe away your finances. All of the saving and investing you’ve done can be deleted in minutes if you don’t prepare for it.

So how does one go about preparing your finances in case a catastrophe were to strike? What are the steps you can put in place this week that would make a huge, unexpected financial hit less painful on you and your family?

Have an Ever-Growing Emergency Fund

Here’s PT’s post about emergency funds in case your new to the idea. To help insure yourself or your family, start one today using a sub-savings account with an online savings account like ING or Ally.

Once you open this account, create an automatic monthly transfer of $25-200 to the account from your regular savings so it continues to grow every 2 weeks, month, or 2 months.

This is money that will only be touched in worst situations where all of your other money has been wiped out and you have no other options. Don’t be content with $500 or $1,000 in this account. Make it grow every month because it’ll insure your financial safety that much more in case a disaster affects your family in the future.

Remember: it’s always a good problem if you have too much in your emergency fund.

Japan Tsunami - Debris

A town in northern Miyagi that sat in a natural valley which channeled the tsunami. Very few buildings remained.

Insure Your Big-Ticket Items

Your house and car should already be insured, but consider extra insurance for prized possessions in case of natural disasters, fire, theft, etc. Maybe you have a $14,000 wedding ring or a rare painting from France that’s worth $10,000.

Can you insure these items for a little bit every month in case of emergency?

By spending a little to insure these high importance items you’ll allow yourself to sleep easily knowing these items can be, at least, monetarily replaced in a time of need.

Contact your insurance agent today to see about rates for your most valuable high-ticket items. Also, here’s a NY Times about the best ways to insure your valuables which can be helpful if you’re going to do this yourself.

Have 2-3 Credit Cards with Large Credit Limits

It’s been a month since the Japanese tsunami and people are still holed up in shelters. In times of need, having quick access to money is important and something that can provide another level of security is a credit card.

Not having to worry about the amount of cash you have in a time of need is one benefit for those who are credit card weary. Need water, clothes, food, or a hotel for your family? Just put it on the credit card, make sure everyone is safe, and worry about the payment later.

Japan Tsunami - Support Effort

A soldier with 35th CSSB hands out a purse to a teacher at a school in Ishinomaki.

Credit cards allow some financial breathing room in a time of need. So get 1-3 cards and put them in your wallet. Every 6-12 months, call the credit card companies and have your credit line increased to insure yourself just a little more. In a time of tragedy, you need to be worrying about the people you love and credit cards allow you the room to breathe when you need it most.

Keep Money in an ATM Accessible Checking Account

If a disaster hits you probably won’t be able to get to a computer to transfer money to a checking account. If you keep a couple hundred dollars in a checking account at all times, you’ll be able to access that cash as long as you can get to an ATM. Without that luxury, you might be out of luck in a time where you need money more than ever.


Just like creating a will, these steps are often put off because people don’t like to think of their immortality or very negative situations. That’s not a good reason to put off creating a healthy emergency fund or getting a credit card. If done correctly, these steps could save you more money than a million frugality tips if a disaster were to affect your life.

Take an afternoon and make sure you have these steps covered in your financial life. It’ll never be the perfect time to do it, but your life is to important to leave up to chance.

I’ll be back next week to share some tips for making sure your house is disaster-proof.

Editor’s note: All the photos above were taken by Mark Stroud, a Combat Correspondent in the United States Marine Corps. His complete photostream can be found on at stroud4341. Thanks, Mark!

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  1. David Williams presents this week’s round-up of risky posts – and your post is in it.

  2. Thanks for the thoughtful post and “Thank You” for all you do for our company. LT

  3. Jenna, Adaptu Community Manager says

    Thanks for the reminder. What a great list of tips!