Protecting Your Finances for Y2K

It’s hard to separate the hype from the reality when it comes to the Y2K question. Yet there are precautions you can take that most would consider a smart step, just in case. This month, I’ll focus on what the experts are recommending to prepare you for the new millennium.

Cash On Hand
While it’s not advisable to make a run on your bank for all of your cash, financial experts are recommending you take a little cash out of your pay each month to have on hand at your home. In the event the banking community experiences temporary difficulties, you’ll have cash on hand to buy the essentials.

Check Your Mortgage
Anytime you have complex numbers calculating over a longer period of time, there are bound to be mistakes. Then when you compound that with potential computer glitches, and the fact that the year 2000 is an out-of-sequence leap year, it’s smart to begin preparing for any potential mistakes. Your first step is to check the math. Software programs such as Quicken will help you do the numbers on your mortgage. Then, make sure you keep copies of your mortgage escrow disbursements and extra payments made on your principal and interest. Keeping and reviewing these documents, along with the

cancelled checks, will help you correct any potential problems.

Check Insurance Policies
If your insurance policies were issued after 1998, they may contain language that limits the amount of claims caused by Y2K problems. Although a computer glitch may delete or add information to your account, your own copies of your policies will keep your coverage sound. The bigger problem lies in the financial stability of your insurance company. If you have a claim and your insurance company is issued by someone with substandard ratings of less than “B”, you may want to consider switching. Look for a company that has a rating of “AAA”, “AA” or “A”.

Make A Budget
If some experts are correct and a short recession occurs, not all jobs will be as safe as we have experienced in recent times. To prepare, write down your after tax income for the month. Then list all of your monthly expenses. In addition, look at your savings. Based on this information, look at how well you’d be prepared in the event of a recession. If you’re poorly prepared, then examine where you can potentially cut costs.

As always, I’m here to answer any questions you may have. So please feel free to call me, as our phone system is Y2K compliant!