I was hoping to write about the logistics of moving and painting parties, but we just had a huge setback with our home purchase. Last Monday we did our walk-through and it went well. There were some minor things that needed to be fixed before we closed, but we were happy with what we got. I was getting excited and my husband seemed pretty happy with the place.
And then it happened…
Our closing has been delayed
While we were driving to Lowe’s to get our painting supplies, my husband got a call and learned that our closing date has been pushed back. Apparently someone in the office dropped the ball and an inspection that needed to happen didn’t, so we can’t close. The new closing date is estimated to be in January 2010!
Having gotten that news less than 48 hours from closing, and just before a major holiday, we’ve been scrambling. Besides throwing off the entire schedule for the move, we now have some financial issues to deal with. We’re supposed to be out of our apartment by December 1st.
If we want to stay, our leasing office will be more than happy to accommodate, but the rate our rent will increase (beyond our month-to-month agreement). This is outside of our budget, and represents a huge financial burden.
Since we first learned about this mess, we’ve been trying to work out a deal. In short, we want our rent and other expenses covered until the closing since it was the builder’s fault. The other options that we asked about (including taking up occupancy before closing) apparently aren’t feasible, so we’re hopeful they’ll play ball.
Of course, we’re not the only ones facing setbacks, so I wanted to review what can be done get your finances back on track when you hit a bump in the road. If you have anything to add, please share your thoughts in the comments.
Assess the damage
It’s easy to get distracted by anything and everything when you get blindsided like this. For us, we’ve tried to keep our to do list as small as possible while we worked through the problems. To do this, we’ve focused on three things to fix the mess we’re in. Boiling things down like this has has really helped us with our sanity.
- Housing: We have a few options with housing right now. We can stay in our current apartment and pay a huge amount for rent. Alternatively, we can stay with friends until we get our housing situation squared away. I don’t mind staying a week with friends, but hunting for a house will take a bit of time, and we don’t want to overstay our welcome. Finally, we can look elsewhere for an apartment with a short term lease while we house hunt. The last option looks most feasible for us.
- Storage: We have items for a two bedroom apartment including a washer and dryer. Given what we have, a 10′ x 10′ unit will suit our storage needs. Instead of unpacking and repacking, we’re storing all the items we won’t need while we look for another place. That will also allow us to a get a smaller apartment, and see if we can simplify our lives even more.
- Long term: We’re in the middle of deciding whether to hunt for some new places to buy or rent. We don’t want to rush thing, though, so (as I noted above) we’re first looking into a cheaper and smaller apartment with a short term lease.
I’ve found that I’m far more more productive if I set smaller goals like this. We took a tally of the money that would be needed for our options and we’ll be making decisions as we move along this process.
Keep your financial cushion
If you find yourself relying on your emergency fund during tough times, you should try to make it last as long as possible. While some people may be tempted to keep their lifestyle the same while they’re living off their savings, it’s smarter to cut back on things, at least until you get back on your feet.
I’d also suggest looking for ways to generated extra income with either a side job, yard sale, or a passive income stream. My income from freelance writing is going entirely toward savings until we have this sorted out.
We don’t want to dip into our emergency fund for this situation, as we want a cushion for when we do finally become homeowners. Dipping too deeply into your savings to buy a home puts you in a dangerous predicament.
We’ve tucked away our money (closing costs and emergency fund) in a high yields savings account where we won’t be tempted to spend it. Creating small barriers like this can help you to avoid spending your emergency funds so you’ll have a solid financial cushion for when you do have an emergency.
Refocus your efforts
Sometimes you can use setbacks and rejections as motivation to move ahead and succeed. We’re using the to-do list that I wrote about above as a guideline for getting through this. Our plan is to just make the best of things, and we’ve already noticed some nice new properties that have become available in the last few months.
We’re thinking positive, thanks in large part to support that we’ve received. I think it will work out alright in the end. Who knows, this could all be a blessing in disguise. We might hear from the builder before this article is published, in which case I’ll post an update in the comments.
What would you do?
Have you ever been in a similar predicament? If so, do you have any advice for us? How did you work through it? More generally, how have you dealt with financial setbacks?