Survive Homelessness

We live in scary economic times where homelessness is no longer just the domain of the mentally ill but is a growing monster hovering over many perfectly “normal” middle class people as well. The bag lady image has given way to the reality that more and more of Americans are joining the ranks of the working poor. With inflation and the lack of decent paying employment and affordable housing, it doesn’t take much of a financial set back for someone to find themselves unable to keep a roof over their head. To know how to prepare for and survive homelessness if it can’t be avoided, it helps to understand how quickly it can happen.

The worst has happened and you have just woken up to find your formerly middle class financial life has become a nightmare – you find that with all of your efforts, you are simply not prepared. Advice and information abounds about how to rebuild your credit, but if a divorce, job loss or medical emergency has just destroyed your financial picture, you are likely more concerned with your immediate survival than in building retirement accounts or investing in the stock market. Just staying sheltered and fed in this society can be very difficult without credit or debit cards or perhaps even a bank account. You quickly become almost a nonperson when it comes to conducting even the most rudimentary sort of business transaction. The prospect of returning to any sort of healthy financial life can seem impossible.

With most Americans living from paycheck to paycheck and making minimum payments on their bills, security is an illusion that can evaporate overnight. One event can and often does have a domino effect for many people who are not prepared for even the smallest emergency. Homelessness happens for more reasons than mental illness and it can happen quickly. A judgment by a credit card company, for example, can wipe out any money you already have in a bank account or prevent you from putting any funds into one as it may be levied and subject to seizure. This means that you may not be able to pay this month’s electric bill and you find yourself being evicted. Your now damaged credit makes it nearly impossible to find a new landlord that will rent to you or an employer who will hire you if you must find a job. The judgment may mean loss of your car and the inability to get to work or look for a job or even get to social service appointments to apply for assistance. Depending upon the state you live in, you may find your furnishings and most of your personal belongings seized for auction or a large portion of your wages garnished. Even if the situation isn’t that dire, having a judgment executed means you can’t even acquire that secured credit card the experts all recommend you get to rebuild your credit because you can’t put the money in the corresponding bank account required to cover it.

Likewise, with banks tightening their rules all the time, something as small as a single overdraft fee can snowball into more and more charges before you are even aware of the problem. You may find your account closed before you even get an opportunity to pay the fees – if you aren’t at the bank on a daily basis, you will likely only receive a notice in the mail many days after the first overdraft and by then it’s too late to rectify the situation. This of course will lead to your being immediately reported to Checksystems and you will be prevented from opening even a small savings account for the next five years of your life – an account that would at least allow you to cash your now paper paycheck at the bank until you can reestablish direct deposit. You may be forced to deal with unsavory storefront check cashing businesses that will charge you hefty fees and you may have to travel a ways to find one if you live in a rural area. You will have to purchase money orders for anything that must be paid and cannot be paid with cash, again another expense you didn’t have in your previous financial life.

You can also forget any discounts and benefits from being able to set up direct debit on any subscriptions and bills – another frequent suggestion by financial gurus to save the middle class money. You may suddenly find you are unable to even have computer service (possibly giving you an extra avenue for part time income or facilitating a job search) and allowing you access to email, which is almost a requirement for doing business with anyone these days. Forget the advice that you forego cable T.V. until things improve, you may have a hard time even getting your basic utilities turned on. Since you have no bank account or debit card to guarantee your accounts with or you now have bad credit (or both),Â many places will simply refuse to do business with you. If they do, they require large upfront cash deposits for their services and this is not something that you can negotiate if you want a telephone and electric.

You may even be unable to sell your unwanted belongings on eBay to help yourself get back on your feet – another common and generally good idea for getting yourself out of a hole – since you have no account to for them to use to verify your identification. The reality is that the only way to turn your belongings into some much needed cash may be to deal with a pawn shop or have a yard sale if you are allowed where you live – neither of which generally pays that well. Sure, you may be able to qualify for financial aid should you decide to return to school to help you rebuild your life – another frequent recommendation by the financial experts – but any excess funds that you would receive to help pay for books and living expenses will come in the form of a paper check and again, if you have no bank to cash it at your only option is the payday loan joint with all the fees. You can’t even rent your textbooks, because that requires good credit and again, an account as collateral.Â While it’s certainly possible and commendable to return to school, you must be prepared for more difficulties than the average student with accounts, transportation and quite possibly parental help as well.

Once you have fallen off the financial ladder, it seems like life becomes a vicious circle. If you’ve been in this situation or near to it, you can truly understand how easy it is for a “normal”, hardworking person or even an entire family to become homeless. While it is not possible to prepare for every sort of disaster, it really does come down to the old advice to save for a “rainy day”. Even if it seems impossible, most people who are on the internet and reading this can probably figure out some way to save or make a few hundred extra dollars. Prepare before you see the snow clouds form and you can often avoid being caught in the worst of the avalanche. IfÂ the storm has already started, there is still a lot you can do to avoid total financial collapse. Don’t think that the worst can’t happen to you, because it can if you don’t act quickly to prevent it. It’s easier to climb up from the bottom rung than to have to stretch for the ladder altogether.

The bottom line is that aren’t too many people left who are truly financially secure. The current recession has shaken most of America and for many, it may be a long time until their situation improves. There is a fine line between being a somewhat comfortable suburban “prepper” and facing inevitable homelessness. In this economy, it’s wise to prepare for the worst by acquiring the knowledge, tools and skills to get through it