Five Easy Steps to Avoid Homelessness
Homeless in the City
You May be Closer to being Homeless than you Realize.
Sometimes we forget how easy it is to find yourself in a financial jam. If you live on your own, and you're barely staying ahead of your bills, you could easily fall prey to being homeless. Even if you are a two-income family without a large savings parachute, it doesn't take much to offset the fragile balance.
Like so many families in America, you live paycheck to paycheck with little chance of putting together any kind of a savings plan. Families usually have a months worth of income to live off of in case of an emergency – but that’s it. Their financial status is such that if one thing goes wrong – like the car needs a new transmission – all reserve savings will be lost. A job loss at this time from one of the wage earners will only increase the tension. The monthly bills keep coming, which means you'll have to scramble to make rent or mortgage.
This is a typical ‘homeless formula’. It's a myriad of mishaps and expenses that hit one after another but usually stemming from one major disruption like job loss, death, addiction, hospital bills, etc until all your bills are behind and you find yourself facing your first homeless night.
The Homeless Numbers:
For the nearly 700,000 Americans that are or have become homeless in 2012, the formula is formidable. 1 person in 197 is homeless. The numbers could easily be doubled if it were not for families that have been ‘doubling up’ – two or three families to a home. For most families, doubling up is a blessing in disguise. The children can afford to save for their own home, and the parents get to spend time with their grandchildren. If you have this situation available to you, consider doubling up until you can increase your financial strength.
1. Avoid the Surprise of being Homeless.
You should know that anyone can fall victim to homelessness. The trick is to take the necessary steps to avoid becoming a homeless victim. If you fit the scenario above and understand that anything can happen in life, you will be further ahead than those that think ‘this’ will never happen to me.
You have to undergo a change of thought. You need to unscrew your pride and do the things that you have to, to get through any hard time. If you look at how you can get the best bang for your money now, it will be easier to keep your head above water later.
Remember, the first night being homeless is a terrifying experience for someone who has always had a roof overhead. Let this fuel your need to get your affairs in order.
2. Know where you Stand Financially.
You should know exactly where you are financially - this means you should know how much expenses you have verses incoming moneys every month. If your expenses are more than your income, you need to take your scissors out and start cutting the fat from your monthly frill bills.
Someone wiser than I once said, “If you’re in a hole... stop digging.” Good words to live by. It means to stop using any more money that will cause your expenses to outweigh your income. A common mistake most people that are struggling make is that they are oblivious to their financial disposition. They don’t know where their break-even point is. They don’t know what their base average monthly expenses are in respect to their monthly cash flow.
When you know what your base monthly expense is, versus what income you’ll make at the end of the month, you’ll be more apt to resist foolish spending. Just knowing what your numbers are will make you react more frugally to the sirens of the fast food restaurants.
Lucky to have warm nights.
3. Stop Eating Fastfood, and Curb Spending Now.
If you are eating fast food more than a few times a week, this is the best place to cut... even if you’re eating off the 1$ menu. If you are buying the big meals and spending more than $10 at any time, you need to cut this out. Besides, the nutritional value and harm that it does to your health you could jeopardize your an otherwise steady work income.
Cutting fast-food sounds like it shouldn't even be on this list but it would surprise you know how many fast-food restaurants make bank from Food-Card recipients. I don't know why people on food stamps/electronic benefits think that this is a better alternative to buying groceries and cooking.
It's a habitual problem that will feed you for a meal when that same money could feed you for a couple of days. You can easily make a dinner and have leftovers for the following day, or better still, leftovers for lunch at work. These are people on benefits that have limited funds but still have a roof over their head and the means to cook their meals.
If there is a dollar store near you, start looking at what you can get there instead of where you normally shop. Think about it, all the things that you normally buy – mouthwash, toothpaste, canned goods - could just cost you a buck instead of twice or three times that amount. If you have never looked at the dollar store as the main source of grocery or other needs, stop by one and take a look. Yes, the people that shop there are a little different from you – hold up, they’re the same as you, they all want to save more than they’re spending. Swallow your pride, get in and get out.
It's time to ask yourself if you really need something before you buy it. Driving the speed limit, and taking care of your car's maintenance to avoid costly repairs. If you gamble, stop – this includes playing scratch forms or sweepstakes that you pay for.
Do you have at least two months salary in savings if you lost your job today?
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4. To avoid being homeless, cut your bigger expenses.
The easiest to cut, and most jobs can be smeared over management and other employees. Your largest expense is usually a car payment, or your rent/mortgage. If you rent, always be on the look out for a better deal. If you have a mortgage, consider if your home is the right size for you, or is it more house than you need. In the past 10 years people have fallen victim to buying “too much” house, and have suffered the consequences. A small house is easier to clean, maintain, and unload in a quick-sale. A larger house is harder to afford, harder to maintain, and harder to rent or sell. Consider your options in selling for a smaller house, or depending where you are financially, (gulp) consider letting your home go if you are upside down in your mortgage. This is a hard decision to make, especially if it’s your first home. It depends on where you are financially that will dictate how much of a sacrifice you need to make. Consider professional advice at this point – you can easily find a plethora of non-profit free services that can assist you in getting all the information you need to make an informed decision.
Your car payment can be looked at in the same way. While on this subject, consider your insurance – if you are not bundling your car, home, and life insurance, find out how you can save when this is done. Start making calls, and keep a journal of things that you need to do to get your expenses under control.
Warmth in numbers.
5. Save today, to avoid being homeless tomorrow.
You need to keep adding to your savings with every check you deposit. As soon as you have a handle on your bills, incorporate a pay-yourself-first habit. Try to accumulate at least six months of income as fast as you can. Having the peace of mind in knowing that you have the financial backing for 6 months should an emergency occur, will give you the time you need to ensure you land on your feet. Once you reach your 6 month savings target, you can consider investments, retirement funds or other needs that you or your family have put off.
The more you are in tune with your finances, the more of a fun game it becomes. It gives you a charge when you save more than you expected to – this also fuels your thought process into thinking where else you can cut, stretch, re-use and recycle.
Your entrepreneurial spirit may surface and give you an incredible idea to market. You’ll soon find that once you start purposefully safeguarding against mindless spending, you’ll wonder why you didn't start this a long time ago.
Final Notes in Battling Against Becoming Homeless.
The Law of Reciprocity is well researched, and practiced by the rich. The rich understand that giving is a very large part of receiving and being able to hold onto it. The bible says 10 percent of your income should be given to Him, that's a good start. If you can't do that much, give what you can and slowly build up to it.
If you are doubling up with a relative or a friend, do your part 'not' to overstay your welcome by helping out where ever and whenever with whatever you can. Even if you're not working, tirelessly do things around the household to pull your weight. Find a place where you can store most of your things - the last thing you want to do is overburden your friends and family with your junk. If you have a group of friends and family, try to spread the stay out with all of them, have a schedule, and stick to it. Do not let your idiosyncrasies become a problem for them - they are already making a huge sacrifice in opening their home to you.
Keep your head up, stay positive, and keep adjusting your financial plan. You were built for tough times like these, and no matter the situation, no matter what you're facing, you have the ability to survive this. Be blessed, and in all you do, have peace.