So, What if the Worst has Happened?

Lost in the Woods

You’ve been laid off, or the foreclosure notice just arrived? As bad as those things are, they are not the worst. The worst is the ninety-ninth week of unemployment, or the day when all options for negotiation with the bank are exhausted. This article will not be dealing with the technical aspects of these situations, but with the need to start making other plans. And the sooner you get started the better.

In order to create your plan you first need to know exactly where you are right now. Starting with exactly how much liquid cash you have. What do you own that you can sell? There can’t be any sacred cows. Of course you get to decide what goes first, but this is about survival. If you have any big fancy assets such as a new car you may need to downgrade. Think about the maintenance costs. The faster and more effectively you work to get back on your feet, the more you get to keep. Three years ago, when I fell out of the money plane without a parachute, I sold all my furniture and a library of 5000 books before the freefall ended. But it was the Nikon that hurt the most.

Then, list all your expenses. Every one of them. This list will not remain static, because you will be dumping everything that is not essential, and downgrading the rest. That means getting the smallest cell phone plan, and the cheapest satellite package. You will live without 500 channels. If you are in a Mercedes you may need to get into an older but still adequate Honda. Include the maintenance cost where applicable. The things you actually need are as follows- shelter, food and clean water, some kind of communication device so possible employers/clients can reach you, some form of transportation plus the fuel and insurance required to run it, and clothing, which you already own. And, some very inexpensive form of entertainment. I recommend Netflix.

The inventory doesn’t stop there. Next, what can you do? Things that don’t involve being hired again in your same field anytime soon. Do you have any abandoned hobbies that are useful? Think only of skills that people will actually pay for. Can you cut hair? Fix a computer? Clean a house? Make a flyer, or put an ad on Craigslist. If your skill requires a license, (like haircutting in most states) just use word of mouth.

My first choice was to start a professional organizing business. I actually didn’t get laid off; I had always been in small business, most recently a construction firm. But when my husband, the contractor, got sick and then died, I found myself broke and homeless. So, I launched Creating Order, got the cards, and hit the networking clubs. Little did I know that the beginning of the economic crash was in motion. Or that it would take several years before I could get enough business to hold on by my fingernails. I ended up cleaning houses for some time. Cleaning houses can be demeaning, and is physically painful if you are over fifty. But, it kept me going.

Finally, do you have any social capital, otherwise known as friends? Make a list of everyone that is favorably inclined towards you. Call them all. Go have coffee and tell them the absolute truth about your situation. If they are in the same boat you can work together. If they are better off they may be able to help in some way. When I hit bottom my friends, both rich and poor, saved my life. Some hired me. Some sent me work. Other times, when nothing was going right they fed me and put enough gas in my car to get to the next job. This is no time to be proud. You would do the same if things were reversed.

If you are losing your home, you need to act quickly. Look into renting a room in a house. That is the cheapest solution to housing and not just for kids anymore. If you have a family then that might not be practical. But you could rent a house and then rent out a room for the income. That way you choose the housemate.

When you have finished your inventory you will know where you stand, and how much money you need on a monthly basis to stay afloat. How fast you recover depends on how you adapt, and how well rounded you were before this happened. If you were so focused on the one thing that you were being paid for that you only know how to do that, and had no time to make friends or keep up with your old ones, the landing will be pretty hard. But if you have actually been living a balanced life all along it will be much easier and faster. But, whatever your situation, if you follow these steps, keep moving, and live frugally, your economic life will turn around. When it does you will find yourself in a very different place from where your journey began. And that may not be all bad. I wish you the very best along the way. Just keep reading, I am writing this for you.

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