Savvy Frugality

It has been quite some time since I have posted here, and I thought I would finally write about the reason why. My summer wasn't spent on vacation or at the beach. I spent the summer being homeless.

It wasn't because I could no longer afford my mortgage, I got fired from my job or got caught up in the housing market bust. No, it started with something that seemed initially to be a very minor problem: a leaky pipe.

It started with a small wet spot on the living room floor. At first, I thought maybe one of my dog's had an accident on the carpet. By the next morning, the wet spot had grown much larger, covering about one-fourth of the living room. I knew then that there was a leak. We called in the plumber, and he confirmed that suspicion and gave us even worse news: a pipe had burst under the foundation of the house. The water would need to be shut off to the entire house immediately.

Within a day or so, the house took on the smell of mold and mildew. We could no longer stay in the house. I immediately called my insurance company and they made arrangements for my family to stay in a hotel. Little did we know that a weekend in the hotel would turn into a four month ordeal.

The house is actually owned by my father-in-law. My family and I just live in it until he retires. We found out the foundation of the house would need to be cracked open so the plumbing could be fixed. All of the furniture, which now reeked of mildew, would need to be removed from the house and put in storage. We would not be going back to the house anytime soon.

After two months we got more bad news: my father-in-law and his wife wanted to put new hardwood floors into the house, and since we had pets, we would not be able to move back into the house. We had to find a new place to live.

After cashing in a portion of my retirement funds, we found a house to rent. Living in a hotel with a pool and a hot tub may sound like fun, but it isn't home. It was a very trying experience for the whole family, and there were times we took out our frustrations on each other. No, we weren't on the street or living in a box, but we had no home for one third of the year.

My experience this summer was a good learning experience, which I will share with you now.

1. If you could not live in your house due to an emergency, where would you live? Do you have a "Plan B" if something happens to your house? Do you have emergency funds you can use to tide you over, or an insurance plan that will cover your costs if you are the victim of fire, flooding or natural disaster? If not, the time to think of one is BEFORE you need it.

2. Are you fully insured? Thank God I was smart enough to buy renters insurance several years ago. Not only does it cover up to $50,000 worth of damage to my belongings, but it gives me up to $10,000 for living expenses if I am displaced (which I maxed out this summer). Make sure your renters or homeowners insurance gives you this kind of protection.

3. Do you have emergency savings? I did, but this ordeal wiped out my funds. Thankfully, I had the funds to spend. Before we got a hotel room with a full kitchen, my family and I had to eat out every meal. That becomes very expensive, even if you are eating fast food and try to eat "cheap."

4. Don't touch your retirement funds unless....you are going to be homeless. Yes, I did dip into my retirement account, but I used that money to pay security deposit and the first month's rent on my new home. I know the common wisdom is you don't touch retirement funds no matter what, but if the choice is retirement money or homelessness, put a roof over your head. I'll replace my retirement money now that I have a place to live.

5. Don't think it can't happen to you. It can happen to ANYBODY, and as I learned, it can be something as simple as a leaky pipe that puts you out of your home. Plan for a worst-case scenario now, and you will save yourself a lot of stress during an emergency situation later.