What do individuals need to do about the Y2K bug?

Everyone knows by now that the use of two digits for dates in some computer programs can result in computer problems under certain circumstances. These problems can happen in large corporate and government computers, in home computers, and in the various "hidden" computers within a wide range of equipment such as alarm systems, cars, and phone switches.

Many conflicting prescriptions have appeared in a variety of media. These include assurances from governmental agencies and flyers in your monthly bank statements indicating that nothing is going to happen, as well as editorials predicting dire failures of basic services such as electricity, telephone, water, police, fire, and medical. This wide divergence of opinion on possible consequences has resulted in an equally wide range of advice as to what people should do to protect themselves.

Current credible studies indicate that there will be some problems in the United States, but that these will probably be non-catastrophic and of relatively short duration. Projections are that problems in developing and undeveloped countries are likely to be much more severe, as less preventive work has been done (primarily for economic reasons). Basic steps that an individual should take now include:

• If you have computer equipment at home, verify that the hardware and all important software are Y2K compliant. Backup all important files prior to year-end if you are not already doing periodic backups.
• Keep a reasonable supply of non-refrigerated food and bottled water. This should probably be enough for three to seven days.
• Those with medical conditions should have an extra month's prescription medicines and other necessary medical supplies.
• Have some cash on hand, at least enough to cover one week's normal cash expenditures.
• Do NOT keep large sums of cash at home; keep your money in a bank or other financial institution.
• If you are concerned about possible bank failures (which are unlikely), be sure that your balances do not exceed federal deposit insurance limits.
• Keep paper copies of all financial records including credit card statements, investments, insurance policies, loans, and bank statements.
• Carefully review all bills and statements received during January and February, 2000.
• Don't be panicked into replacing equipment in your home or car. Research any recommendations you receive and get a second opinion before spending money.
• Be on guard against Y2K scams. The con artists are using Y2K in a variety of guises in their never-ending quest to steal your money.

Just use common sense in these last months before 2000. The Y2K problem is real and there could be some difficulties encountered, but don't take unreasonable actions that could waste your money or expose you to con artists and thieves.

Raymond S. Kulzick is a CPA, and technology and management consultant with offices in Pinecrest at 12177 S. Dixie Highway. If you have questions or suggestions for future columns, please contact him at 305-233-2280 or rkulzick@kulzick.com. More information is also available on the firm's Web site at www.kulzick.com.

This article provides information of a general nature only and should not be acted upon without seeking appropriate professional advice concerning your specific situation.

© Copyright 1999 Raymond S. Kulzick. All rights reserved. 991025.

This publication provides business, financial planning, and/or tax information to our clients. All material is for general information only and should not be acted upon without seeking appropriate professional assistance. Disclaimer.

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Copyright © 1999 Kulzick Associates, PA - Last modified: September 13, 2008