Preparing for Inclement Weather

We are currently under a severe weather watch. The article below has some tips that may assist you with being prepared before and after the hurricane.

Lesson 1:  Preparation
It isn't good enough to just have an insurance policy to protect against disaster.  Much of the devastation can be mitigated by some good advanced planning. While we know about common preparations like food, and water and knowing evacuation routes, here are some financial tips to help you in advance of a disaster:

A. Know your coverage:  Take time to review your insurance policy coverage so that you know what you are covered for.  Does your insurance policy include flooding?  Will your policy cover the replacement value (value of comparable item new) of lost items or fair market value (current value of used items)?

B. Documentation:  Do you have photos of your items to document their condition for an insurance claim?  You may want to consider uploading these photos to the cloud or other internet storage location to access after an event.

C.  Organization:  If you should need to evacuate, do you have important papers with you?  Beyond your insurance documents, you may want to organize your birth certificates, Social Security cards, and other vital records to go with you.  Bank On Hampton Roads has a checklist that might be a great tool to get started.

D.  Communication:  Discuss with family members where you plan to evacuate to in the event of a disaster and identify a key point of contact that does not live in your local area.  You may have a family member or good friend who could serve as a key contact in the event that people need to know where to find you or update friends and family after an evacuation.  Communication with one person will minimize the drain to cell batteries and communications may be spotty after a disaster.  Your friends and family will want to know you are safe and secure after an event.

E. Protect your stuff:  Think about how you might store your valued items that can't evacuate with you to protect them from damage.  If flooding is a potential, you may want to move items to a second floor to protect them.  You may also wrap items with plastic to minimize water damage.  Ahead of a disaster, it may be difficult to anticipate what will impact you most (wind, trees, loss of utilities, or water) but better to protect as much as possible.

F. Have an emergency fund:  This is a great reason to have a stash of cash.  Not only will you need funds during an evacuation, but the recovery process may mean time away from work and extra expenditures you may not have anticipated.  Even with a fantastic insurance policy, there will be deductibles to cover if you need to file a claim.  Also, in the aftermath of a storm, you may find that ATM's may be unavailable and some services may go to a cash only system if power is interrupted.

Lesson 2:  Getting out of harm's way

A. Know when to leave:  If your city management is giving you an evacuation recommendation, it is better to heed that evacuation and find out you were safe than to not leave and life through the devastation.  No one can replace you; your stuff is secondary.

B.  Communicate your plans:  Let your neighbors, family and friends know you are leaving and where they may be able to reach you.  If you have a disaster point of contact established let them know who is the primary contact.

C.  Plan for a period away:  Once evacuated it may be several days or a week or more before you may be able to safely return.  Plan to take items you need for a period of time.  This will include medicines, food supplies, bedding, children's activities and pet supplies.  Your emergency fund will be a great help if you need to stay in a hotel and eat in restaurants for a few days.

Lesson 3:  Return to normal
Returning to normal may be more of a process than an immediate action.  Depending on the damage encountered, recovery can take from a day or two to a year or two.  You may be living with an altered normal state for an extended period of time as you get back on your feet.

A.  Inventory damage:  As you return to your home after a disaster, you will want to begin to inventory the damage and file insurance claims.  Your photos will be a help for you.  You want to develop as complete a list as possible as you file your insurance claim.  If your damage is less than the deductible, you may need to bear that cost alone.

B.  FEMA:  If the area is declared a disaster area, FEMA funds may be released to help restore normalcy.  There will be FEMA stations set up; check your news or FEMA website to learn where you can speak to a FEMA representative to explore your options.

C.  IRS: There may be some losses may reduce your tax liability with the IRS and the IRS may offer extensions for filing taxes for certain disasters.  IRS has a Disaster Assistance page to give you general information about help you may receive.

C.  Other resources:  During the recovery phase of a disaster is where the community really comes together.  Neighbors offer assistance to neighbors, but additional resources from non-profits, churches and public resources may be needed to get back on your feet.  Bank On Hampton Roads' Resource Guide is a great place to start as you search for community resources to help you recover.

We never want to see our fellow Americans suffer disaster, but when disaster strikes we can learn lessons from people who have been there and avoid losses in future disasters.  In the meantime, if you would like to help victims of Hurricane Harvey, consider making a financial contribution to American Red Cross' fund for relief for people in the wake of this devastating storm.

Freeze Your Credit For FREE!

Everyday we place our personal information in the hands of companies and trust that they will keep our personal information protected.  We swipe our credit cards and debit cards at retailers, we provide identifying information to establish online accounts with social marketing applications and in placing online purchases.  Our healthcare providers, utilities and communications providers all require personal information to establish accounts.  Bank On encourages citizens to protect their identity, but what happens when the companies we do business with don't protect our information?

Over the last few years we have heard reports of many companies being hacked.  Here is just a short list of a few that might have touched your life:
  • Anthem
  • AOL
  • Apple
  • AT&T
  • Cox Communications
  • CVS
  • Dropbox
  • Ebay
  • Equifax
  • JP Morgan Chase
  • Michaels
  • Target
  • TD Ameritrade
  • Uber
  • US Department of Veterans Affairs
  • Virginia Department of Health
  • Yahoo
These hacks make us more and more vulnerable to identity theft.  

If you want to have greater protection for your identity, here is some good news: on May 24, 2018, President Trump signed the Economic Growth, Regulatory Relief and Consumer Protection Act into law.  This law enables you to request a free credit freeze for anyone requesting one after September 21, 2018.  

Credit freezes protect identity thieves from opening up an account in your name.  Credit freezes prevent a credit reporting bureau from releasing your credit information to a third party, so new accounts cannot be opened without you taking a positive action to release the freeze.  Currently, state laws govern the establishment of a credit freeze and it can cost up to $10 for each credit reporting bureau to.  This new law makes freezing and unfreezing your credit free.  

To learn more about these new protection visit and search for "credit freeze".  Protecting your good name will soon be free!

Are You Taxed?

Earning income is a great thing, but the more you earn under our tax regulations, the more you owe.  
Often, life events can throw us into a new tax situation without us really realizing it.  Things like marriage, divorce, children becoming young adults, retirement, pay increases and more can impact our tax circumstances and we may find ourselves unprepared for the tax bill we get. 

If you find yourself owing the IRS, here are some ideas to help you overcome this year's tax liability and prepare for next year so that you don't have to repeat the process.  Most of the actions that need to be taken are things you can do right now.  

1. Paying your tax bill.  If at all possible, you should pay what you owe in full and on time.  It may be a big hit, but it is better to adjust your spending over the next couple of months and pay the IRS than to incur penalties and fees associated with non payment or late payment (up to 5% per month).

If you are unable to come up with the funds to pay your taxes out of your monthly budget, consider borrowing from other sources before doing a payment plan with the IRS.   IRS monthly interest can be higher than traditional sources.

If you have no other option for payment, the IRS offers payment plans.  IRS has both short term payment plans (less than 120 days) and long term payment plans.  These plans allow you to repay your tax debt over time and avoid incurring additional penalties for non filing or non payment.  There is an interest charge for these repayment plans, but it is much easier than the non payment penalties.  

2.  Adjusting Withholdings:  If you owed an amount that was hard to bear, you may want to consider adjusting your withholding on your W-4.  This is the form that tells your employer how many deductions you anticipate for your taxes.  If you reduce the number of deductions, your tax payment will go up each payday and your paycheck will go down.  But paying each payday is easier than having a big hit at the end of the year.  

The IRS encourages employees to use the Withholding Calculator to perform a quick “paycheck checkup.” An employee checking their withholding can help protect against having too little tax withheld and facing an unexpected tax bill or penalty at tax time in 2019. It can also prevent employees from having too much tax withheld; with the average refund topping $2,800, some taxpayers might prefer to have less tax withheld up front and receive more in their paychecks.  If changes to withholding should be made, the Withholding Calculator gives employees the information they need to fill out a new Form W-4, Employee’s Withholding Allowance Certificate. Employees will submit the completed W-4 to their employer.

3.  Increase Retirement Participation:  One of the easiest ways you can reduce your tax bill and prepare for your future at the same time is to increase the amount you contribute to your employer retirement plan.  This money is not included in taxable income on your W-2 at the end of the year so it can save you some money on next year's taxes.