How to protect your well-being and your finances when disaster strikes

There are steps that can mitigate financial crisis and assist everyone in recovery

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Q: We are fortunate to be able to host our extended family who had to flee the wildfires up North. It’s the least we can do to help them get through this crisis. They know their home has been damaged but are not sure yet if it’s a total loss. We are helping them look for temporary shelter options back home, although it’s all a bit overwhelming because they’re not sure what work will look like when they go back. Is there anything you can suggest to help them financially? ~Clayton 

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A: This year’s weather events have been hard on Canadians across the country. From tornadoes and hurricane-force winds to wildfires, flooding, or earthquakes, any natural disaster has the potential to upend our way of life and source of income. While the kindness of family and strangers is currently helping many in Western Canada navigate their immediate needs, for those who have been affected by wildfires, there are steps they can take to mitigate financial crisis.

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Look after your well-being first

Take care of your own and your family’s immediate needs first. Follow provincial and local instructions about evacuating to a place of safety because even a small place to call home temporarily will provide you with a degree of security to weather the coming days and weeks.

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Register with the emergency support services program and apply for any assistance you’re eligible for. There may also be services in your community, such as the Red Cross, government and local relief efforts to help with finding shelter, buying groceries, and replacing household items for those who have lost everything.

Your Health and well-being is more important than your credit rating 

If you’re struggling with feelings of stress, grief, survivor’s guilt, or if you’re anxious or worried about pets and the well-being of loved ones, reach out to any medical professional, or support worker at an evacuation centre for help. Counselling services are available to help you look after your emotional well-being.

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Be mindful of your physical health, too. Air quality and environmental safety concerns might make it difficult to exercise or play outdoors, so establish a routine to get regular sleep, meals, and indoor exercise, especially if your stomach is upset or your blood pressure is elevated.

Protect your financial well-being as you look toward recovery

If you’ve experienced losses but have insurance for your home, a tenant’s policy, or auto insurance, contact each insurer to start the claims process as soon as possible. If you’re required to provide a list of what you’ve lost, look through photos and videos on your phone, check messaging apps, and scan social media accounts as a reminder of key possessions. Ask your friends and family to do the same. Take your time though, reliving what you’ve lost could stir up emotions that will be difficult to process.

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You will likely face a disruption to your income, or you may not have a job to go back to. If so, consider potential sources of income support such as employment insurance, benefits through your employer, social assistance, and other emergency support programs, as you may qualify due to reduced income for an indeterminate amount of time.

Contact your creditors to advise them about your situation and to ask for payment relief. Most creditors have hardship programs and will be able to offer you support. They will have more options available to help you if you contact them before you fall behind with your payments.

If you were struggling with debt before the crisis, be aware of the right of offset and protect any emergency support funds that are deposited into your bank account by opening an account at a financial institution where you don’t owe any money.

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Contact your utility service providers and cellphone companies and ask each of them for payment assistance. Enrol in hardship programs, if appropriate, and scale back or cancel services wherever it makes sense to do so.

Be on the lookout for any help that seems too good to be true and trust your gut. There will, unfortunately, be those who try to take advantage of the situation with phoney fundraisers, predatory offers of help, or outright theft of items you have left behind. Identity theft is also a risk. Monitor your credit reports, advise your financial institution of your situation, and be cautious with how much you post on social media.

When you don’t know when you’ll get your next paycheque, it’s important to create an emergency budget. In a crisis, outline a budget for your most essential expenses. Account for income based on emergency funds and/or savings that you currently have available to you. Consider withdrawing from non-registered accounts or TFSAs before cashing out RRSPs, which come with tax consequences. Contact your investment adviser for help understanding the pros and cons of withdrawals from the types of accounts you have, and try to leave your savings intact for as long as reasonably possible.

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Financial Hardship Reasons for Unlocking Locked-In RRSPs and Pensions 

During a crisis, if your income is no longer stable, avoid taking on debt because the more you owe, the more challenging your situation will become, and the harder it will be to rebuild your life after the urgency of the crisis has passed. In addition, your creditors will be less inclined to offer payment relief if your debt load is also increasing. Pare back spending back to only the most essential expenses and resist any additional buying until your situation is more stable.

The bottom line on recovering financially after facing a natural disaster

It can be difficult to accept help, especially if you see everyone around you struggling as well. Contact a non-profit credit counselling organization in your area for help with outlining a budget, looking at income options, figuring out essential expenses, communicating with creditors, and guidance around rebuilding for when the time is right. Go easy on yourself as your new normal takes shape and be open to ongoing offers of support. You can return the favour or pay it forward once you’re back on your feet.

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Related reading: 

How to Get Relief from Your Mortgage and Avoid Foreclosure 

Protect Yourself Financially With a Sound Emergency Plan 

5 Things You Need to Do to Live on One Income Successfully 

Peta Wales is President and CEO of the Credit Counselling Society, a non-profit organization. For more information about managing your money or debt, contact Peta by email, check or call 1-888-527-8999.

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