How to Avoid Homelessness

The prospect of being homeless is terrifying. There are few necessities as important as having a home to go to each night. Sadly, the path from having a home of your own to being homeless can be a slippery slope. But with some planning and constant financial awareness, it can be avoided. Follow these steps to avoid becoming homeless.

Instructions

Difficulty: Moderate

1. Do lots of financial planning. While this sounds like something only wealthy people do with their stockbrokers, in truth financial planning is something that everybody does, however well or badly. Think about your long and short term financial situation and in which areas of your life you can save money. Even if you can put aside only a few dollars a month, the structures created by saving will help you avoid becoming homeless.
2. Get insurance. An outrageously large medical, home or auto accident bill can be the catastrophe that moves you from home ownership or rental to homelessness. Accidents happen all the time and no one is immune from them. It's important to have some level of insurance coverage so you do not end up bankrupted by a huge medical bill or without a place to sleep after a house fire or other major damage.
3. Know where your paycheck is coming from at least 2 months in advance. If you have a stable job, then you should be okay. But in cases where you get the dreaded pink slip, you should start looking for work to tide you over immediately. Even if it's something below your skill level or qualifications, having a job to break the fall will give you some income, which will help you avoid becoming homeless.
4. Build a support network. Having friends and family who will help you out in tough times is a priceless asset. Build a support network by going the extra mile for people around you and developing long term friendships. While staying with someone might be a strain on the relationship, it is certainly better than ending up on the street.
5. Be proactive. If you're a homeowner and you know you'll be getting behind on your mortgage payments, contact your lender immediately. It's in the lender's best interest to help you avoid foreclosure and keep your home. If you're a renter facing a temporary financial setback, you may be able to negotiate a payment schedule with your landlord. Acting is always better than waiting.