Central Texas Floods: Financial Planning in the Wake of the Storm

Heavy rains and flash flooding swept through Central Texas this past week, impacting communities across the region. From flooded roadways to damaged homes, the sudden storms have left many local families facing unexpected costs, insurance questions, and disrupted financial plans.

We've spoken with clients affected by the storms and are here to help our community navigate the aftermath. Whether you experienced damage directly or are concerned about future risks, now is the time to reassess your financial readiness.

1. Assess the Damage — and the Cost

If your home or property sustained damage, your first priority is safety and documentation. Photograph everything thoroughly before beginning any cleanup. This will be essential for both insurance claims and potential FEMA assistance.

From a planning standpoint, it’s important to understand:

• How much of your emergency fund may be needed
• Whether insurance deductibles or uncovered losses will strain your cash flow
• If long-term repairs could impact your retirement contributions, savings goals, or investment strategy

Even those not directly affected by the flood should evaluate whether their emergency savings are sufficient in the face of future extreme weather.

2. Understand What Insurance Covers — and What It Doesn’t

Flood damage is not covered by standard homeowners insurance. You must have a separate flood insurance policy, usually through the National Flood Insurance Program (NFIP) or a private provider. If you live in areas near Brushy Creek, the San Gabriel River, or other flood-prone parts of Williamson, Burnet, and Travis Counties, it's worth confirming your flood risk zones—even if your home has never flooded before.

Key Questions to Ask:

• Do you have flood insurance? What are the limits and deductibles?
• What additional living expenses (ALE) does your policy cover if you are displaced?
• If your home value has increased significantly, is your coverage still adequate?

Now is a good time to review your property insurance, auto insurance, and umbrella liability policies. We help clients conduct these reviews to ensure their risk management strategy matches their financial plan.

3. Tap Into Emergency Assistance—But Plan for Long-Term Resilience

In the short term, some homeowners may qualify for disaster assistance through FEMA, Texas Division of Emergency Management (TDEM), or local city and county programs. But while these programs can offer partial relief, they are often not enough to cover full recovery costs.

That’s why a forward-looking financial plan matters.

It might be worth building your plan to account for:

• Emergency reserves equal to 3–6 months of essential expenses
• Proper insurance coverage based on risk exposure (not just minimum requirements)
• A home maintenance fund or dedicated sinking fund for repairs
• Flexible investments and cash flow that can absorb unexpected events

4. Don’t Let One Disaster Derail Your Retirement or Financial Goals

After a major event like a flood, it’s easy to get pulled off course. You may need to pause contributions, take out a loan, or prioritize urgent expenses. That’s understandable. But a trusted financial advisor can help you:

• Rework your budget and timeline without abandoning your long-term plan
• Rebalance your portfolio if you had to liquidate assets
• Use tax strategies (like casualty loss deductions if applicable) to soften the blow

For those considering early withdrawals from retirement accounts to cover costs: be cautious. Penalties, taxes, and long-term opportunity costs can be steep. Let us help you evaluate alternatives.

5. Financial Planning Is Also Risk Planning

The recent Central Texas floods are a reminder that climate risk is financial risk. We may not be able to predict the next storm, but we can prepare for it financially.

At Axon, we believe financial planning should protect your life—not just grow your portfolio. That means stress-testing your plan for unexpected events, helping you create buffers, and making sure your goals stay intact even if your roof doesn’t.

Final Thoughts

If the recent floods affected you—or if they’ve made you think more seriously about your financial resilience—we’re here to help. Talk to a local financial advisor about how to protect your financial future from whatever storms may come.

Article written by Brady Lochte, Financial Advisor at Axon Capital Management