Hmm.. perhaps I should leave the military lingo to the pros.
Speaking of pro, I felt like Jarhead’s post Monday was really well timed, either he’s just that good, or it was a great coincidence. I’m back at work, paychecks are rolling in, bills are almost caught up, hospital bills are down to 3 digits. There’s so much light in this tunnel, it’s getting hard to see clearly. I know these signs, it’s nice to see them again. It means my little family is coming out of our recovery stage and we’re about ready to start moving in a forward direction again. So, in my mind, it triggers all sorts of mental bells, and I thought today, it might be interesting to share some of those. Not that our way will work for everyone, but maybe there’s value in sharing.
So, the run down of the basic situation. We had our primary breadwinner out on temporary leave of absence from work for 12 weeks, with a large hospital bill due right at the beginning of that time. This situation, in various forms, is a pretty common way to put yourself into bankruptcy. Thankfully, we knew it was coming and we had 7 months to prepare. There was a lot of planning, and a lot of saving, and then baby came a little early, just to keep us on our toes. That put us into the regroup mode.
Regrouping, means you reevaluate, reposition, and look at options. Once baby came, there was no more time for saving, no more time for making more money or buying more stuff. Now we just had to keep food on the table and lights on for 3 months. So, we ran the financial numbers, knew what goals we needed to hit, and did it. There were weeks when we knew we would have to live out of the pantry, so we did that, and that was fine. There were weeks when we only needed to supplement out of the pantry. The garden had a good spring, and that was a wonderful bounty to have. Despite our best efforts, not everything got paid in full or on time. :-D Shocking, I know. But, we did the dance of the cutoff notices and made our way through the 12 weeks. Work was nice to get back to, the paychecks were even more welcome. That started our recovery mode.
In recovery mode you recover from the damage. Triage to decide what needs the most attention, and then start putting out the fires one by one. This part isn’t fun, but at least things are getting paid. As we come up out of recovery mode, thoughts start to shift to all those nice paychecks, and all that shiny stuff that really needs buying. :-D You know what I’m talking about, all the of the things that got put on the back burner, the treats and luxuries that have been denied. So, right before recovery mode ends, it’s really helpful to get the reins ready for your finances. Without bill collectors reminding you about financial obligations, it can be really easy to blow discretionary spending into dangerous territory. Keep a handle on things so you can move in a forward direction instead of spinning in a circle at the first sign of traction.
Finances – A new budget is in order! I know, I’m a geek, I like the number crunching. Especially when not every last penny is going into a Health Savings Account. I’ve spoken about this before, it’s incredibly important to keep all adult members up to date about finances. I got my yearly raise while I was out on leave, plus my 401k draw changed percentages, so the take home pay is different than what we started with in January, and we have different goals now. It’s time to make a plan for what will actually be coming in for the rest of the year, and decide where we want to focus our financial windfalls. (We kind of follow the Dave Ramsey method of debt paying.) We do have a debt that’s really close to being paid off. We do have some wiggle room between the money in and money out totals. It’s time to plan what to do with that. Long term savings goals are always good to reiterate, these kinds of conversations are a great time for that.
Preps – We went through about half of our food stores. I knew we would. We both thought it was a good idea, there were stores that were starting to get a little old, so clearing them out and using some up was a good thing for the health of the food storage. Now, the older stuff is gone, and there’s room for all the pretty jars of garden bounty that I’ve been canning for the past couple of weeks. We will have to do some purchasing soon, of some of the grain staples, and legumes, but for the most part I’m content for now to focus on replenishing the stores of fruits, veggies and pickles. I do have to keep in mind that we are probably not at the 90 days level of food storage. I’m not panicking about it, I know we have 30+ days worth of food still, and that’s nothing to sneeze at. The end of summer will only improve the situation. When the rush to preserve has slowed to a crawl, then I can turn my thoughts to filling the remaining gaps in the pantry. I expect by the end of the year we will be back up to 90 days worth of food.
Just like that, we have a plan of action for the rest of the year. Priorities thought about and decisions made. Long term direction is agreed upon.
We’ll probably still buy some luxuries and stray from the straight and narrow, but at least we’re both headed in the same direction as we work our way out of the hole. I can’t stress how important that is for personal stability.
I’m one of those preppers who thinks economic roller coasters are going to become more common as we head down Hubbert’s Curve. Getting in practice now is good. Although, it doesn’t feel like practice anymore, it just feels like life. Anyway, go forth and make a plan. Put some numbers down on paper, set some goals and get to a new level of preps. There’s no need to wait until Jan 1.
- Calamity Jane
I’m glad that your prior planning paid off handsomely. I’m also thinking that a lot of us are going to face some financial issues in the next 12 months. Getting and staying out of debt right now would be a good idea.
We are very close to our debt pay off. We are also buying a house, so the big chuncks of extra money that normaly go to pay off more of the debt is being squirreled away for any house buying expence(which there are quite a few). Soon as it is ours though the next 4-5 months will go to paying off the last of the consumer debt, and then my major prepping will begin in earnest, until that is we start thinking of babies. But that at least for me is still a little ways off.
Ah, crunch time, a good reality check, TY, setback’s of one frame or another will hit us all, few have arrived, with encouragement and knowing others do this, so can me and mine and be wiser for it, the shock will not send us catatonic with the Katrina stare down the highway looking for the “G” relief….
I hear you! Every year, due to a conference my husband teaches classes at, we lose a month of income and have extra expenses. And many years that month comes at the end of our business’ ‘slow period. He still does it, as he believes that over the year his teaching there brings in more consulting business. But …. losing a month of income? Especially after two months of light business?
So we save before hand, and skimp during the slow/no pay months. Eating what we’ve stored during that time is SOP. Making everything from scratch isn’t SOP, since it’s summer and to keep the house less uncomfortable I rarely bake. OTOH, we went into the hot weather with baked goods in the freezer as well as plenty of stored goods.
What is harder to balance is how much I can afford to spend on fresh food I need to buy to preserve, like blueberries and peaches. This year I really had to limit my fruit canning/freezing due to lack of income, which will cause some ripple effects thru’ the coming year. But that’s how it is some years.
That is a hard one to balance. I know I have to closely watch what gets spent on preserving. The garden helps with that, as anything that comes out of there is practically free. Speaking of free, keep an eye out for gleaning opportunities. Fruit trees that are going to waste in parks or parking lots.
Sometimes focusing on less expensive produce can help, instead of peaches, plan to get some cheaper local apples this fall. Not as exciting, but more fruit for your buck. OR switch to veggies, squashes etc that can be delish out of a jar. Carrots, corn, sweet pumpkin, now’s the time to cultivate a liking for the less pricey stuff.
We are in the middle of a financial crisis, I’m so stressed. We own a house and the tenants are gone but they owe us 3 months of rent. Now we have to decide whether to keep the house or try and short sale.
Wow… not sure what to say.
How many houses do you own?
Why would you set yourself up that tight on finances? My understanding of rental-economics is that 100% occupancy rarely happens, if you can’t weather a spell without tenants, or without rent checks, perhaps you shouldn’t be renting.
If that’s rough advice, I’m sorry. I don’t know your exact situation.
If it were me, I would sell and recoup whatever money possible, then invest in something a little bit smaller, or less risky. It seems to me that losing 3 months of rent shouldn’t send you into a panic about short selling a property. But, I’m not a real estate tycoon, so what do I know?
these are not “normal” times. Real estate was hyped into the crisis it’s in. the banksters all went along with it. even if they need to go “chapter 7″ they may be able to keep their principle residence, and their cars.
it’s probably time to consult an attorney JL.
My husband got a good job in another city, we only own the one house. We are looking for cheaper house to rent. Now I think I want to rent again and accept section 8. But we have to rent a dumpster out and clean it out first. At least with section 8 we are going to get rent.
how far apart are the two cities?
(would it be practical to “move back” and live in your own house on the weekends?)
does the house you own hold any real sentimental value to you?
(had you planned to retire there? for example) (when you get it paid off, in__? years, will you be able to afford the taxes?)
how quickly can you terminate the lease on the place you’re living now? do you have school aged children, if so which city has better schools?
would you consider living in a furnished room, or a mobile home, at the “work” city?
I don’t want to move back into the house, it’s over 200 miles away. We don’t have a lease where we live so we can move. The schools here are better also. I rented the house to someone impulsively, I am by nature not an impulsive person. We couldn’t afford to pay rent and mortgage. Now I kind of want to just be done with the house. But we have paid 9 years into it. This sounds awful, but I wanted to rent with section 8 hoping they would burn it down. I’m going to speak to a financial advisor. Thank-you everyone, the house is also infested with roaches now too.
Sell it.
(unless it’s in the Philly suburbs, in which case, sell it to me at a good price)
there are real estate investor groups here that buy “bad” or “ugly”, “any condition” houses. they advertise in their local areas. maybe there’s one near you that’s “legit”. they do the cleanout and repairs, you get to walk away.
section 8 comes with its own horror stories. you may find the house will be un-inhabitable/ will require complete renovation in future years. (although possibly tax deductable)
CAUTION!!!! Section 8 aren’t paying for it, (we are) they don’t take care of it, even less then your 3 month $ loss tenants did. (who you have to clean up after)
you should sue in small claims for the due rent. you can garnish their tax returns or other payments. employers must also garnish wages if a court orders it done. Be thankful they are gone, the worse option would be having to kick them out and being owed rent.
JL,
I am extremely knowledgable with regards to mortgage loss mitigation etc. I have helped many, many people navigate the waters you are in. If you want you can contact me at 12flet@gmail.com & I’d be more than happy to help you.
Irish,
Don’t blame the “banksters” – 98% of the people went into home ownership with the hopes of profiting by leveraging the banks. Remember, the banks loaned anywhere from 90-110% of the value of the home, analyzed the current market data, checked credit, income, cash reserves, employment etc. So who took the bigger risk?
The average buyer was into a deal for 10% or less cash down while the bank risked the remaining 90%. Lest we forget that inherent with EVERY investment is risk, but nobody buying houses wanted to consider that fact.
Home mortgages are one of the best deals on the planet – you risk little percent-wise, get to write off the interest paid on your taxes & when properties go up, the gain on your initial investment is huge. You sell the home later for a profit & the gain is tax free (to a limit) & you’ve written the interest payments all along while having shelter – hello? Good deal!
Are the banks crooked? Yea, but it is mostly how this private enterprise has used taxpayer dollars to offset any losses incurred. However, as far as home mortgages, I disagree that they have ripped off people. Sure you have isolated incidents which happened at a low sales position but by in large, they have helped many, many people.
actually I blame the Real estate people much more than the banks.
… and even with the colapse of real estate values here,
I’m still priced out.
On the surface I would agree with you – real estate agents seem to corner the market for information & the dispersement of values. Also & as a (gross) generalization, they are a self-centered & greed driven group who, by in large, put their personal profit ahead of (their) customers. That is an established fact.
Because of the Internet, their function & value is in the process of change. Up until approximately 10 years ago, Realtors controlled nearly 100% of the information because of a locked system called the Multiple Listing Service (MLS). Customers had no choice but to go to a Realtor for help & then it was a matter of choosing the lesser of evils – literally.
All that being said, the base issue – like any other commodity, is consumer demand. You name it – from the Pet Rock to Apple stock, it is ALL driven by demand & that is the reality & also, the illusion. You take a couple thousand dollars of metal, rubber & leather, add a couple thousand dollars more of labor & advertising & you get a Ford Escort or a Mercedes. Who determined the end price? Consumer demand.
Grain, gas, corn, clothing – it’s all the same, it’s the world we live in & you cannot change it. If you are happy about it or completely miserable, it has zero effect upon that condition BUT has an enormous effect upon your state of mind & attitude which, is the only thing you can control.
Do you want to buy a house? That is purely on you. I’d suggest getting creative & thinking outside of the box. I have seen people buy a house with sweat & will power, nothing more – so it is possible. There is a thousand ways to skin a cat so start thinking outside of tradition.
sweat & will power, nothing more…
from your keyboard to Gods ears.
I started a company selling small wood stoves for a second job and it has been a blessing.
I now sell food on my site and store my inventory at home! It will never make me rich but the company is paying for my prepps.
This is not for everyone but find something and try.
Tim