What would you do to manage your finances if you were forced to leave your home due to an emergency or natural disaster?
Fires. Floods. Ice storms. This year, wildfires in Ontario and British Columbia have forced hundreds of Canadians to evacuate their homes. And it is difficult to predict or prevent these natural disasters.
So what would you do if you were forced to leave your home due to a natural disaster? You may have already thought about what belongings you would take with you and who would be responsible for ensuring that people and pets evacuated the premises safely. But what else should you think about?
What about your finances? You were able to evacuate the premises, but you still have to pay your bills. You might even have more than usual. To help you get through this type of crisis, here is a list of seven tips:
Contact your home or personal property insurance company, even if your home was not damaged. You may be entitled to benefits related to an evacuation.
Keep all receipts (e.g., gas, food, clothing, lodging, medications, and personal hygiene items). You may be able to claim reimbursement for certain expenses through your insurance policy or a government assistance program.
If your home has been damaged, start drawing up an inventory of your movable property in collaboration with your insurer since you will need to provide proof of loss. In addition, you can enlist family members or friends to help you list what you have.
Work with your advisor to determine how and when you can withdraw from your savings if needed.
Savings are not registered. You can withdraw money from any non-registered savings account without tax consequences (except in the event of a taxable capital gain resulting from the sale of an investment). In addition, you can repay the amounts withdrawn at any time.
TFSA. You can withdraw money from your TFSA without tax consequences. Your withdrawal amount is added to your TFSA contribution room on January 1 of the following year.
RRSP. All the amounts you withdraw from an RRSP are taxable and are therefore reduced by the applicable tax deductions. In addition, when you make a withdrawal, you lose the contribution room associated with the amounts withdrawn. Therefore, your future contributions will be based on your existing RRSP contribution room.
Study your cash flow situation, especially in anticipation of significant purchases you will need to make in the short and long term. For example, you may need to replace essential items, find temporary accommodation, or rent or buy a car.
See when you will need to make arrangements to negotiate an interruption or cancellation of direct debit payments, bills, or specific services. For example, repayment of mortgages, lines of credit, and loans (principal and interest) will be modified or stopped to ease the financial burden immediately. Check with your financial institution to see if they offer unique resources and arrangements for people in your situation.
If you forgot your prescription drugs or medical equipment during an evacuation and you have a benefits plan with your employer, contact your insurance provider for assistance with replacements.
