Monday, June 29, 2009

Five steps for surviving the loss of your job, your home, and your savings

I feel qualified the answer the above question because I ran completely out of cash four times—in 1949, 1953, 1974 and 1979, and yet never missed a meal. (Full disclosure: During one six-weeks stretch in 1949, my meals consisted solely of bread, peanut butter, and milk.)

Here are five steps I recommend to those of you who’ve lost your job, your home, and/or your savings:

1. The first step for an alcoholic is to admit he has a problem. Your first step is to stop blaming others and admit that you borrowed money to buy a vehicle or real estate that you could not pay cash for. Resolve that other than going to a pawn shop in an extreme emergency, you will never, ever, borrow money again.

2. Move in with your parents, in-laws, or find a cheap place to rent. In fact, if you still have a small but steady income, such as from an internet business, move to an area such as northern Minnesota where you can rent a decent apartment for $300-$400 a month.

3. Pawn or sell everything you can part with, no matter how little you get for it. It does not matter what you originally paid for your digital camera, home theater system, mountain bike, violin or exercise equipment. What you needed now is CASH, at any cost. You can always buy new stuff later, once the emergency is over.

4. If you are unemployed, use Craigslist to search for a new job anywhere from Fairbanks to Key West. When you find that new job, ignore the pleas of your mate (if any) to stay close to relatives and old friends. MOVE! (When you strike it rich, you can always move back.)

5. Once you get a few paychecks and need to buy a car, follow the advice of Maria Lopez, 34, a petite seƱorita from Ogden, Utah. She writes:

“Well Jack, I didn't check the oil of my old car, so I killed my cute little red Honda Civic. From previous experience, however, I knew that you can get a really good deal on transportation if you buy a car that's been in an accident but has an excellent engine. I watched the classifieds and found an ad for a 1988 Mazda 323 that had body damage so the owner was only asking $300. When I test drove it, the engine ran great. So my dad said it was a good deal, and we bought it. As of this past January, I’ve driven it over 65,000 miles and it's never needed any major repairs …”

The above information is taken from How to survive the loss of your savings, your job, and your home.

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