13% of Americans reported facing economic hardship due to climate change in 2022, according to “The Impact of Climate Change on American Household Finances,” a recent US Department of the Treasury (DoT) report. Americans experienced these challenges during a year in which DoT calculated the cost of climate and weather disasters in the US to have totaled more than $176 billion—the third most costly year on record.

With climate hazards projected to get worse in the coming years, it is more important than ever for all of us to prepare our household finances for the possible effects of climate change—and find ways to help our neighbors.

Financial strain on households can lead to especially negative outcomes for vulnerable and marginalized communities—including BIPOC, lower-income, disabled, and older individuals. These communities are most susceptible to post-disaster financial hardship, often due to their historic location in areas already suffering environmental degradation.

So, where to start?

Needs of the Neighborhood

The DoT report identifies awareness-raising about local and regional climate risks as one of the first steps. While it is important to understand the range of climate threats that affect us across the country, it is even more crucial for each of us to know the dangers most likely to impact our specific area, such as flood exposure in Appalachia, wildfire exposure in the West and in border regions near Mexico, and heat exposure in the plains and Mississippi River areas.

“Climate Mapping for Resilience & Adaptation” helps you understand climate risks for your area. Use their address search tool to get historical data and find major climate risks for your household.

The related “US Climate Resiliency Toolkit” offers more resources like nationwide climate mapping, case studies of community resilience projects, and step-by-step guides for boosting climate readiness skills for those with influence in state, local, and Tribal governments, nonprofits, and the business world.

Between both sites, you can map risks for your location, learn how others have increased resilience, and build your capacity to prepare. They make climate adaptation practical and accessible.

Once Aware, Time to Prepare

Once you’ve built up your knowledge on the most pressing climate risks for your household, what’s next? Here are some steps you can take to address the concerns outlined by the DoT report and fortify your household’s finances in case of future emergency:

Make a plan.

Having a plan in place for your household in the event of a climate hazard can reduce real-time panic and ensure that you are as ready as possible to respond to anything that may come your way. Ready.gov provides an entire “Make a Plan” section that includes resources for building financial readiness, assembling a physical preparedness kit for your home, and planning for an evacuation, among other steps. The tool includes customized resources for older adults, people with disabilities, and households with pets and animals.

Review your property insurance.

Property, auto, and flood insurance can provide a safety net in the event of a future climate hazard. However, standard home insurance policies often will not cover flooding, earthquakes, or landslides and may also exclude coverage for other specific disasters, so it is crucial to investigate your current coverage to find out what may be missing.

The Insurance Information Institute, an insurance industry association, provides helpful resources for consumers to better understand how their insurance works, industry trends relative to the climate crisis, and further resources on disaster preparedness.

Get your home to do the saving for you.

The Inflation Reduction Act (IRA) created tax incentives that can provide benefits for eco-friendly home upgrades. For example, the DoT report recommends pursuing available tax rebates for installing solar panels or upgrading heating-and-cooling systems to reduce energy and utility bills when faced with rapidly rising temperatures. The upgrades help mitigate rising greenhouse gas emissions and the cost savings can help build your financial resilience for the future.

The Low-Income Home Energy Assistance Program (LIHEAP) also provides financial assistance for energy upgrades to qualified households.

Seek further support.

Several assistance programs exist to help your household with climate-hazard recovery and resilience. Some major programs and resources to look into appear in the box below.

Using these strategies for disaster preparedness can help protect your finances and alleviate some of the potential climate-consequences on household financial security.