How NOT to be Homeless and Starving Over the Next Decade

I've been broke, in the past. During most of those years, I had young children - whether or not you are the sole person who could keep them out of a homeless shelter, or have help, in the form of partner or family members - that's a scary place to be.

We never actually were homeless, although we came close a few times. We moved almost 20 times before buying our first house. Generally, we moved for either jobs, or because my husband found a better deal on a rental.

Even after leaving the prospect of homelessness behind, we had some VERY lean times. We had to sell almost everything to afford our second home, which lead to some creative money management for over a year - and, part-time jobs, as well.

We survived - together. Our kids learned from our experiences. NONE of them take on debt easily. ALL are self-sufficient in their lives, and not only don't ask for money, but have offered to help us. It's sweet, but - so far - has not been needed.

The one child who we occasionally treat to airplane tickets and other high-cost luxuries is the Franciscan sister. She works hard, and most of her salary goes back to the order, to help support those sisters who are no longer earning. I'm fine with helping her out, on occasion. She seldom asks.

I'm a member of a group - the Baby Boomers - who are either retired, or expect to be in a few years. Few of us had access to what our parents expected - pensions, paid-off homes, and full retirement at 65. Most are like me:

• Right after high school graduation - in 1969 - the economy took a BIG dip. Unemployment was high, prices were held in place by government controls (which also meant that we weren't getting raises), and prospects for improvement were dim.
• I managed to pick up college credits for almost 2 years of school at a bargain price; later, when I returned to finish, the price had skyrocketed (the 1980s).
• Most of my peers married within the next 5 years; many had children shortly thereafter. Only a few divorced - my peer group was Catholic, and generally old-school about divorce. Even now, other than those whose spouse died, most are married - often, if not always, to the same person. It may just be an unusually stable group.
• In the 1970s, we were hit both by inflation AND unemployment. And, after Carter was elected, fuel price increases AND gas rationing. All that, along with rising prices in nearly all staples, made budgeting an exercise in creative accounting.
• Most of my female friends went back to work, after our kids got old enough. That didn't put us much ahead financially, but it did cushion occasional unemployment of our spouses. It also put us further in debt, to pay for another car, work wardrobe, and out-of-home meals.
• Ironically, just after we made enough money to begin investing in a retirement fund, the market crashed - Oct. 1987. My husband's 403(b), funded by taking less money home, went severely down, and didn't recover fully until almost 10 years later. Same thing in 2008 - we lost retirement money. Although we continued to put money away, it probably halved the cash we normally would have had in a less volatile market.
• For many people, college costs cut into retirement cash. We got lucky there - the first kid got a FULL ride - tuition, room and board, books. She worked for spending money all four years. The second joined the Navy. The third took some loans, got some grants, and we kicked in a few thou. During her first year, she took a military class, and joined ROTC. She did her training at the end of her freshman year, and only occasionally asked for a few bucks for extras. She married before graduation, and became her husband's responsibility.
• We really kicked the retirement accounts into high gear the last 20 years before retiring. Also, we put effort into paying off bills - cars, credit cards, home, etc. Our goal was to reduce expenses to what we could carry with only pensions (from teaching jobs, not lavish). The Social Security (reduced due to WEP - the government takes from our EARNED benefit because we are also collecting a government pension) is an extra.

Keep in mind, my experience is a GOOD one. My husband is generally frugal, we don't take fancy vacations, and we don't lease pricey cars. One July, I got an extra couple of thousand dollars for work I'd done throughout the year. I stuck it in my purse and forgot about it. I was cleaning out my purse one day in November, in the teacher's room, and ran across the check. The other teachers couldn't imagine not having immediately deposited it, to cover bills (well, MOST of the teachers were astonished - the Math teachers were not).

Other people? A few years ago, I think it was Money magazine who polled average people, and found that many would be hard put to come up with an extra $400 for a household emergency. Again, not my experience, nor that of my friends, but - I do know some people who live on the edge. They are generally also those that live in expensive houses, drive the latest cars, and take luxury cruises regularly.

Living The High Life, On Credit, is surprisingly common. While all races do it, it's more common in Black communities, where what you drive and where you live is more important than having money in the bank. Typically, Black homeowners buy a home that is 2-3 times as expensive as what a White person of the same income level would. And, the Black buyers usually have less in savings, and more in credit card debt. Which, makes their finances as stable as a house of cards. One month without income, and they're on the road to living in shelters.

That's why it was so heartwarming to hear about The New Frugality. Apparently, with income so iffy, people are generally responding by spending less. They've been making more meals at home (and, buying the ingredients at the store, rather than having them delivered as a Meal in a Box), learning to sew, garden, and make small home repairs. We may not be experiencing a Return to the Fifties, but we may get through this experience with more secure and reasonable home budgets.

Now, what specifically helps?

• Pay off all consumer debt. Don't buy on credit - except for essentials, like plumbing services if your house pipes break - and pay in cash whenever possible. Take advantage of layaway, sales, resale shops, and couponing.
• Set aside money for emergencies. Don't touch it unless absolutely needed. Refresh the amount when the crisis has passed.
• Put aside money for retirement - but, don't go crazy. A prolonged economic downturn could wipe it out, leaving you worse off than if you re-worked your budget to live on less.
• Stockpiling SOME food is sensible; putting all your spare cash into 'meals in a bucket' is just foolish - AND makes it tough to bug out quickly if the violence draws near.
• Garden. Flowers are nice, but veggies/fruit should be the bulk of your efforts.
• Learn to cook from scratch - no, Bisquick is NOT scratch. Learn to use recipes, and freeze/can/dry leftovers.
• Control the expenses you can - food, housing, car purchase (in general, don't buy new), hobbies, leisure time recreation.
• Don't lend/share your home with those you don't know VERY well. Just trust me on this.
• Work on your relationships; divorce is expensive, and picking fights with family diminishes the number of people you can count on in an emergency. A spouse who values peaceful relationships (NOT a doormat, but one who is not a drama queen) is a blessing. Cooperate with others, be generous with your time, volunteer in your local community. But, don't be timid about laying down the law with a spouse or child who is spoiling for a fight. This is especially important for women, who will stir up trouble if not firmly corrected (Not ALL women, but a sizable subset will egg on others to wreck their marriage. Women should distrust marriage advice from those without a stake in making that marriage work.)
• Never leave a job, if possible, without having another, even if part-time. Develop side businesses/gigs, and keep any skills/licenses up to date. You never know when they'll be needed.