As I mentioned in a previous post, a flood led to my family and I becoming homeless last summer. OK, we weren't living on the street and begging for food. We were living in a hotel and depending upon my renters insurance to cover room, board and food. But, eventually that coverage ran out, and the house we were living in was still under construction. I had to cash in $5,000 in retirement savings and pay security, pet deposit and first and last month's rent to move into another home.

On top of this, my wife, who is not as thrifty as me, managed to overdraw my checking account by several hundred dollars. I had to cash in my stocks to pay off the debt. This now left me with no retirement fund, no emergency savings and no savings account to speak of. I, the guy writing the Savvy Frugality blog, am now back at square one. The worst part is there is little I could have done to avoid this situation, other than having more money socked away for myself.

Sometimes you will be faced with a situation over which you have very little control. The victims of the recent earthquakes and tsunami in Japan are certainly in that type of situation. Even if they were fully insured, had lots of savings, etc., the survivors are in a situation where they are just trying to find basic needs like food, water and shelter. With that in mind, here are a few pieces of advice I have for you:

1. Have a disaster recover plan. This was my main mistake. If something catastrophic happens and you lose your home, what is your Plan B? Where will you go, and where will you live? Think about this now. Waiting until the worst happens is too late.

2. Save until it hurts. I was saving, but not enough, it turns out. I thought I had that aspect of my life covered, but you can really never have too much in savings, unless you aren't meeting your basic bills and needs. If that is happening, you might need to dial back your saving.

3. Get your whole family on board. If you are the only on living a life of Savvy Frugality and the rest of your family isn't, your plan for saving, investing and living isn't going to work to its full potential.

Although I am in a position of starting over, I look at it as a positive thing. I now have an opportunity to rebuild and make my financial situation stronger than it was before. The next time I face a disaster such as losing my home, I will be prepared. Here is my recovery plan.

1. Emergency savings. Just like Dave Ramsey says, you have to have something socked away for emergencies. I am going to build an emergency savings account of $1,000.

2. I am going to get my wife on board with the need to save and live below our means. That means I will be getting her a copy of The Total Money Makeover by Dave Ramsey. I would just have her read this blog, but she won't take my advice to heart. What can I say? She is my wife and believes I don't know things. (OK, that's a joke, but contains a nugget of truth).

3. Come October, when our lease is up, I will be getting a cheaper place to live. Right now my rent is $1,200 per month. My plan is to find a place that is close to half that amount.

4. We will cut our expenses so we are living off 3/4 of what I earn. The other 25 percent will go to retiring debt, including my student loan and car payment. After we are debt-free, that money will get dumped into our long-term savings and retirement.

5. I will buy a home. I plan on getting a duplex, living in one half, and renting out the other half. The rent will cover the monthly mortgage payment for the whole building, allowing us to live rent-free.

That's the plan. I'll keep you up to date on our progress.


  1. Anonymous // July 9, 2011 at 2:17 PM  

    Hi, I just stumbled upon your blog. The things you went through sound horrible, loosing your house and having trouble to make ends meet while it is being rebuilt. I can only applaud you for the way you are dealing with it.

    When I first read your post I thought it was about the massive flooding in the Southern US in May, but apparently even something seemingly small as a bursting pipe can destroy a house? I've read many houses in the United States are made of wood, is that the reason it was so easily destroyed? Here in the Netherlands almost every house is made of bricks and mortar, I can't imagine that they would be as vulnerable to water as a wooden house.

    By the way, you're remark about your wife only believing things written by other people. I guess that is pretty common, I think my fiancée would have the same reaction.

    I wish you the best of luck getting back on track!

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