 The University of Minnesota Extension and North Dakota State University Extension Service have developed Recovery After Disaster, the Family Financial Toolkit to assist in financial recovery from disaster. The toolkit is free and available at this website. In a perfect world, we would be prepared for a disaster, but we know that this is not always the case. This video series has been developed to assist in the immediate need for financial recovery information following a disaster. The six videos in this series will identify important financial considerations for your disaster recovery. Financially recovering after a disaster is like putting together a picture puzzle. First, you must identify the puzzle pieces of your current or post-disaster financial picture. The more pieces you identify, the easier it is to find the next pieces. So the more you know about your current financial situation, the easier it will be to figure out what you need as you work toward financial recovery. In this video, we will discuss the five steps to assessing your current financial situation to help you make the best decisions for your personal financial situation. 1. Assess your monthly income and expenses. 2. Assessing your net worth. 3. Determine whether or not you can afford another payment. 4. Review your credit report. 5. Summarize your current financial situation. Step 1. Assess your monthly income and expenses. Assessing your monthly income and expenses by completing a monthly spending and savings plan or budget is one useful tool to help families determine what actions to take following a natural disaster. This tool, available in the Family Financial Toolkit, will help you understand your income and expenses prior to the disaster and estimate what they will be post-disaster. It will help you track your income and expenses for the next three months and make adjustments to your budget as needed. This process will help ensure you are adequately informed as you make important decisions affecting your financial resources. Well, we encourage survivors to talk to case managers, a long-term care committee representatives, as well as their financial professionals, their bankers, or credit union representatives to help them look at their situation and look at all the options available and to make the best decisions for themselves. Also, as folks are making decisions about rebuilding their home, repairing their home, should they move, and you're considering all of these options, it's so very important to look at the big picture and look down the road. Will you be able to sustain those decisions in a year, in two years, three years, because you really want to make the best decision for you and your family? There are people out there who are ready and willing to help you make those decisions and to make the right decisions and to make sure you're going to be taken care of as you go forward in this. You know where to focus your energies, to focus your financial resources. It's a horrible thing, but you certainly learn a lot from the process. Often times, materials needed to make these decisions have been lost in the disaster. Information to recover these documents is available in the Family Financial Toolkit. Because you will be needing those documents as you apply for recovery assistance and down the road. So make a list of what types of documents you have lost through the disaster and take the steps necessary to replace those. Step two, determine your net worth. Determining your net worth will help you determine your financial options or strategies. A net worth statement is a snapshot of the current value of your financial holdings. It is calculated by subtracting the value of your liabilities from your assets. A worksheet to help you determine your net worth is provided in Unit 5 of the Family Financial Toolkit. Knowing your net worth is great in terms of just kind of a snapshot of your financial health and it's another great thing to just kind of track over time. But in terms of using that to make recovery decisions, it really leads to kind of knowing what your options are and identifying those options. Start to build a picture of what can I do in a post-recovery situation? What can I potentially liquidate? So having a clear picture of that really just leads to options and what your options are and knowing those options in comparison to what your other options are. That's really where you can make a cost-benefit analysis of these various options and really figure out what's going to work specifically for you in your unique situation. Step three, determine whether or not you can afford another payment. Before you decide to take on another payment to pay for disaster recovery, ask yourself, can I afford another payment? Comparing your debt-to-income ratio to what financial professionals consider an affordable amount of debt will identify another piece of your post-disaster financial puzzle. When used with the other assessment tools, you will have a better understanding of the big picture of your post-disaster financial situation. It will better prepare you to determine which actions to explore and what financial options are available. The worksheet to help you determine if you can afford another payment is available in Unit 5 of the Family Financial Toolkit. They take a look at that number and sometimes I feel consumers might think, well, if they offer me a loan, then I must be able to afford it, but that's not necessarily the case. Again, that's only an indicator of one's ability to afford payments. It's important to know where your debt-to-income ratio, where that lies. In conjunction with what your spending plan looks like, having those two pieces of information together is going to be a really good way to make lending decisions, whether or not you want to take on new debt. I guess the moral is that even if they say you're qualified for it, it's also important to know that that doesn't necessarily mean that you can afford it. Before you jump into taking on another mortgage or taking on other loans to repair or rebuild your home, make sure that fits into your big plan because it can be dangerous if you commit to additional debts and you're not able to sustain those in the future. We had to take a look at what we're bringing in every month between a husband and a wife working full-time and what our expenses were before the disaster. What we sat down as we figured out maximum, what can we afford to do in terms of more loans? What we did is we actually walked through some of those worksheets that were provided by NDSU, sat down and figured out, okay, so here's where our bills were before. Here's what we're projecting for our new expenses with those loans, and that helped us decide which loans we could take, what our maximum expenditures were going to be, and then basically even it all out from that point, and it really is difficult to basically say okay, for a second mortgage, we're going to have to cut back here, here, and here. Here's what we can afford to do, here's what we're going to have to do on our own. Step four, review your credit report. If your financial records have been destroyed in the disaster, it is often hard to assess your current financial situation and properly plan for your future. Credit reports can help by filling in some of the missing information about your financial obligations. A credit report will give you a current snapshot of your financial information, including mortgage, car payments, and revolving accounts such as credit cards. Order your free credit report by visiting the website, calling toll free, or by writing in. From just kind of getting a sense of what's out there, what's reporting out there for you in terms of your credit obligations, all of that will be reflected on there. It's also just a great tool to see if there's any discrepancies. But the big thing is in terms of making recovery decisions, and specifically making recovery decisions regarding possibly lending, that credit report is going to be something that a lender is going to take into account when they're making a decision whether or not to potentially lend it to somebody that might be in need of a loan. Summarize your current financial situation Financial situations are often complex following a disaster. It is natural and normal to experience a range of emotions when determining your overall financial situation, ranging from surprise, regret, relief, disappointment, anger, anxiousness, or excitement. Knowing the big picture of your financial situation will help you make the best decisions for your situation and possibly speed your recovery from disaster. With this knowledge in hand, you can determine whether you have enough resources for recovery or whether you will need to access disaster resources. It may be beneficial to seek help from a financial professional as you make decisions. When you put all those pieces together, it gives you the roadmap of sorts that one would use to navigate some uncertain times. One of the things that I often find myself saying when I'm working with our members that are in distress and trying to develop a plan is if we can make it look good on paper, we have a chance to make it look in reality. If we can't make it look good on paper, there's no way that we're going to magically make it look in reality. That's where pulling all those things together to know what those steps are going to be is really important. It's all those different pieces, like looking at your net worth and like looking at your debt-to-income ratio. You start to generate a picture of what your options are. In the last few minutes, we have heard about the steps to take to determine your current post-disaster financial situation. One, assessing your monthly income and expenses allows you to know what resources you have to work with and what financial commitments you have. Two, determining your net worth allows you to get a big picture of your financial situation and will provide valuable information as you make decisions following the disaster. Three, determining whether or not you can afford another payment is vital as you consider various resources and options to borrow money to rebuild. Four, reviewing your credit report can provide helpful information if any paperwork was lost during the disaster and can inform future decisions. Five, summarizing your current financial situation will again provide you an overall picture of your current financial situation and be helpful as you strive to make the best decisions for your personal situation. It is important to recognize that your life will never be exactly the same as it was. What do you want your new reality to look like? We encourage you to view all of the financial recovery after disaster videos, the Family Financial Toolkit and other materials at this website.