How Do You Plan For Financial Disaster?

by Guest

This is a blog swap chain letter organized through the Yakezie network. There are 4 stops. Check out my post, Poverty can Teach Lessons for Life, at the next stop!

When we do Yakezie blog swaps, we are given a set topic from a moderator.  This swap’s topic was: YOU ARE POOR OR HOMELESS, WHAT WOULD YOU DO TO CHANGE YOUR SITUATION?

This is not exactly the easiest topic for me to write about.  Why?  Glad you asked.  First, all my frugalness now is done to prepare me for emergencies in the future, so that I should never truly be broke and homeless. Secondly, my parents (and friends and extended family) would support me if I ever fell into truly desperate times.  I know I will never be homeless, and for that I am very thankful.  So frankly, this topic just isn’t one that I can relate to easily.

Soup Lines

That said, it is a good topic and one that it is probably important for all of us to to think about.  I am just going to modify the situation a tad to fit my own circumstances (that’s the joy of being your own blogging boss).

First off, my net worth is well into the positive range between my home’s equity and other investments.   This is to my advantage.  If I was suddenly without major income I could sell my house and use the profits to buy a nice travel trailer to live in rent free. A blogger who writes at The Boxcarkids’ Blog found herself homeless with four kids a couple years ago.  In order to keep her family from becoming homeless, she “rehomed” them in a used travel trailer.  In my opinion, that was an excellent solution to a tough problem, and I admire her for that. Having safe shelter eliminates a lot of issues that hold homeless people back from bettering their circumstances.

So my housing is now covered. Now I need to look into bringing in some income.  Fortunately, my education and training (graphic design and writing) lends itself well to  freelance work, so I should be able to bring in some income to cover my basic expenses even without having a full-time job.  There are also options such as Amazon Mechanical Turk and Swagbucks that I can use to bring in some extra income and/or gift cards. I would also seek out local employment opportunities as they became available.

Not having a mortgage cuts out a significant portion of my monthly expenses.  But I would also need to evaluate all my other expenses and get them down to the basics.  What can be cut?  What can be reduced?  I have reduced my electricity usage by 30%, but could I cut it more?  Internet access is important for the type of work I do.  Cable is not important.  Minimum cell phone access is important for safety and networking reasons (albeit, I could easily survive on the most minimal plan available).  Home phone service is not a necessity.  Saving for emergencies and retirement is always important, but only AFTER all your other basic needs are met.

To be honest, in this situation the best defense is a good offense.  Just thinking about a situation where I could become homeless terrifies me.  And it motivates me, too.  It motivates me to continue to be financially responsible and to save for emergencies and for the future.   How about you?

Denise writes at The Single Saver, a site dedicated to helping singles and small families save money in simple, easy-to-implement ways.

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{ 6 comments… read them below or add one }

krantcents April 29, 2011 at 8:58 am

I use this as an example with my students. If I were stone broke or homeless, I have employable skills that I could use to re-start my life. A job is important to rebuild one’s confidence. I live close to work to remove the need for transportation. Keep my expenses low and start saving to get out of this as soon as possible.

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retirebyforty April 29, 2011 at 10:21 am

A stable shelter is an essential stepping stone to get out of homelessness. A vehicle or a trailer is a good temporary solution, but a real address is extremely important. It’s great that you can do your work online so maybe you don’t need a real address after all. 🙂

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LaTisha @FSYAonline April 29, 2011 at 4:48 pm

I would have to agree with the Mechanical Turk suggestion. Right before I got hired I was down to almost nothing and I made 50 bucks transcribing audio clips. It took me all weekend but I was able to put gas in my car!

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Joe Edward April 29, 2011 at 7:12 pm

I liked the travel trailer idea. I never really thought about it, but one could get into used one cheap and stay at a campground.

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Jacob @ My Personal Finance Journey April 30, 2011 at 8:01 pm

Agreed! The travel trailer is a great idea! I also like the idea of working on your freelance jobs! However, would it not be tough (at least at first) to have enough freelance work to support a family?

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Denise @ The Single Saver May 1, 2011 at 7:53 pm

@Jacob, I am the Single Saver so I only need to fend for myself. LOL!

@Joe, the nice thing about a travel trailer, too, is that you can move it if you get employment in another city or state eventually.

@Latisha, isn’t MTurk great? I made a couple hundred last year over a couple months and it really helped me pay off some medical expenses super fast.

@retireby40, addresses are easy to come by… either through friends, cheap PO boxes, or even the address of a campground you are staying at.

@krantcents, you example to your students is excellent.

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