Take Cover as Disaster Season Starts

Atlantic hurricane season starts this month. Even if you live in the safest cul-de-sac in America, you don't want to play the odds with your most important assets -- your family, health, home, and financial well being.

Not all "disasters" are front-page news. According to FEMA, one in four flood claims occur in low-to-moderate risk areas. A crisis can be natural or man-made, large or small. A blizzard, burst water pipe, or medical emergency can spell trouble for your finances if you're not prepared.

Minimize damage if disaster strikes

We've gotten smart about preparing for storm season, stocking up on emergency must-haves like canned goods, batteries, prescriptions, and bottled water, but don't forget to stock up on the financial essentials, too.

Having up-to-date insurance policies (particularly if you've made home improvements or acquired any pricey stuff), wills and advance medical directives (bummers, I know, but essential), and an emergency stash of hands-off cash can prevent a personal crisis from turning into a financial one.

Need more convincing? Consider this: A study a few years ago found that the biggest reason people rack up credit-card debt is not day-to-day overspending, but failing to have enough money to cover the costs of a crisis such as a medical emergency or an unexpected home repair. It's the classic example of a short-term solution (using credit cards as a patch) turning into a long-term financial problem.

Stock up for the storm

How can you prepare for a doom-and-gloom scenario you hope doesn't occur? Create a financial "Command Central" for your family. This financial emergency kit is a road map to your daily life and contains everything you need to keep things humming along, as well as essential items to help speed your financial recovery.

I call it the "Motley Fool Grab & Go Kit" -- it should be small enough that you can literally run a mile with it tucked under your arm (or at least walk briskly around the block without it being overly cumbersome).

The Motley Fool Grab & Go checklist:

• Contacts -- work, kids' schools and friends, out-of-state family
• Medical information -- doctors, list of prescriptions and pharmacy phone numbers
• Recovery information -- copies of your home, car, and health policies and cards; forms for filing; current inventory of your possessions
• Financial information -- list of bank and investment accounts and where they're located; debt obligations and due dates
• Critical papers -- copies of your wills, trusts, and medical health-care directives; deed to the house; passports
• A small stash of cash -- enough to get by just in case ATMs aren't operable

Add any items to this list that are essential to keeping your family finances on track. Also, you don't want to tote around the originals of essential documents, so make
copies for this mobile emergency kit and make sure everyone in the family knows where to find it.

A little preparation will help you sleep better at night and help you weather and recover from a disaster more quickly.

Dayana Yochim's "Grab & Go" kit is color-coordinated with her dog's leash so she remembers to actually grab both, should she need to go. She offers grab-and-go financial advice that provides immediate results in readers' wallets at www.GreenLight.Fool.com.