An aerial view of homes destroyed in the Palisades Fire on January 27, 2025 in Pacific Palisades, California.
Mario Tama | Getty Images
When the Los Angeles wildfires started dominating social media feeds, I reached out to a dear friend and client to check in. “We just found out an hour ago, our house is gone,” he replied.
Enduring a wildfire or any other natural disaster can be emotionally and financially overwhelming.
Here in Southern California, many of our clients and community are displaced and in shock by what the flames have taken. Families are trying to navigate the insurance red tape, worrying about where they will live and trying to make difficult decisions — such as if they can afford to rebuild or if they need to absorb the losses and move on.
While rebuilding or restoring stability is challenging, taking specific steps can help you regain control of your finances and better prepare for future emergencies:
1. Ensure your safety and apply for disaster aid
Register for assistance immediately. The Red Cross and the Federal Emergency Management Agency, or FEMA, provide help including temporary shelter, emergency financial assistance and emotional support. Apply for disaster relief at disasterassistance.gov, and see if your state has wildfire or disaster-specific aid programs.
2. Assess your financial situation
Take inventory of accessible financial resources, including savings accounts, emergency funds or credit card limits for immediate needs. List financial obligations — such as rent, mortgages and utility bills — and begin looking into payment deferral options.
The Hughes Fire grows near Six Flags Magic Mountain amusement park and the community of Santa Clarita on January 22, 2025 in Castaic, California.
David Mcnew | Getty Images
3. Adjust spending and budgeting
If you work with a financial advisor, let them know what has transpired. We’ve had clients recently tell us they’ve lost their homes and had to evacuate, and we are putting notations on their accounts and discussing short-term liquidity/income needs.
Use free budgeting tools to track spending.
Prioritize spending on essentials such as food, water, housing, and medication. Cancel subscriptions, defer large purchases and cut non-essential expenses to preserve cash flow.
Consider temporarily reducing the amount of money you are saving for retirement in order to build a bigger financial cushion to help you now.
Contact utility companies, credit card issuers and other lenders to let them know your situation and negotiate payment plans or request hardship assistance. Many companies offer disaster forbearance programs that allow you to defer payments without penalty.
4. Protect your credit
If personal documents such as Social Security cards are lost or stolen after a disaster, freeze your credit at all three major credit rating agencies. You can always unfreeze your credit once the crisis has passed if you need to borrow.
Also freeze any credit cards not in your possession. In many cases, you can do this easily in the card issuer’s app or online. It’s always a good idea to set up push notifications of any charges that occur. This way you can make sure all the charges are true and yours.
5. Begin the insurance claims process
Insurance claims may take weeks or months to process, so the sooner you get started, the better.
Request “additional living expenses,” or ALE, coverage to pay for temporary housing, meals and other expenses.
Make a detailed list of damaged or lost items with photos and receipts (if available), and estimated replacement costs. This will support insurance claims.
Document communications with your insurer. If you believe your insurer has undervalued your claim, consider hiring a licensed public adjuster to negotiate on your behalf.
— By Winnie Sun, co-founder and managing director of Irvine, California-based Sun Group Wealth Partners. She is also a member of the CNBC Financial Advisor Council.