This post is from new staff writer Sierra Black. Sierra writes about frugality, sustainable living, and getting her kids to eat kale at Childwild.com.

The recession has hit families where they live. For many, it’s forced a change of address. Think about all those foreclosed homes and urban deserts: One in every 400 homes received a foreclosure notice last year. Unemployment is approaching 10%. Some families no longer have a place to call home at all.

That’s the situation for Jamie Alden (not her real name), a single mom of four kids who found herself caught up in a series of recession nightmares that have left her homeless and jobless, but not hopeless. She’s chronicling her adventures on The Boxcar Kids, where she writes with painful frankness about trying to find a job, help her kids thrive at school and keep her family together while living in a small travel trailer with her children.

The Boxcar Kids
Alden is a far cry from the stereotypical homeless person. A professional with a master’s degree in anthropology, Alden had a career for over a decade in environmental science. She relocated to California after a doctor recommended the warmer, drier climate would help one of her children, who has a chronic illness.

Like a lot of relocating families, Alden accepted a job in her new city before she’d sold her house. So she rented it out, and rented a place near her new job.

Then the economy tanked. Her renters defaulted, and she used most of her savings going through expensive legal ordeals to evict them. She was left with a damaged home that she could not find new tenants for. Unable to make the mortgage payments and pay rent on her new home, she lost the house to foreclosure.

Meanwhile, her company started layoffs. “California has a little budget problem,” she says sardonically. “We couldn’t work on any of our contracts.” She survived the first two rounds, but eventually her lack of seniority put her under the axe. As soon as he found out she’d lost her job, her landlord asked her to move out. “He knew I wouldn’t be able to pay the rent,” she says.

Throughout the summer, Alden and her kids found themselves living in state parks in second-hand tents. She used free hotel stays she’d accumulated over years of business travel to buy them an occasional night of warm beds and hot showers.

Now they have a 26-foot RV they call home. The school district considers them homeless, but Alden doesn’t. Homeless, she says, was when they lived in a tent and had to move every week. This is comparative luxury.

Alden named her blog after a series of popular early 20th century children’s books about four kids who live a scrappy, happy life in a boxcar after their parents die, until they are rescued by a kindly, rich grandparent. There’s no rich grandparent to rescue Alden and her kids from their boxcar. Instead, Alden is learning to navigate a maze of social services and getting creative about frugality in ways most of us have never considered.

She’s not alone. Many formerly middle-class families have found themselves at least temporarily without a home to call their own. Foreclosures were filed against 2.8 million properties in 2009, while apartment vacancies are also at a 30-year high water mark. A lot of people are just not living in houses these days.

Where are they going? Many are staying with family or friends. Some are in shelters. Others are what Alden calls “alternatively housed” in RVs, camper vans, anything with a roof.

The best defense is a good offense
Alden’s story, and the many others like it are a scary wake-up call for me. My own family is not so far from the precipice these folks fell off of.

We own a home, but don’t have a lot of equity in it. We have a small emergency fund, but not enough to get us through even one month of normal living expenses. I’ve been putting all our money into debt repayment, not building up capital. We have some retirement funds that are still pretty hung over from the financial collapse in 2008.

In other words, we’re a lot like many middle-class families: comfortable enough day-to-day, but not secure enough to withstand a major disaster. Time to make an emergency plan: Not just an emergency fund, but a plan that goes beyond bank and savings accounts. Here’s what I came up with:

  • Be prepared.This means building up more of an emergency fund. Experts argue over how many months expenses you should put by, but no one seems to think less than 3 months is safe.

  • Be frugal. Living simply now means having fewer adjustments to make in the event of a financial catastrophe. Not only can you pay off debts and build up savings faster, but you’re already living below your means. If the means suddenly shrink, you have a smaller gap to cover to make ends meet.

  • Be organized. Know your net worth, and keep tabs on all your accounts. When we were moving last year, I discovered a stock fund I’d forgotten I had. Those forgotten assets matter if your income dries out.

  • Protect your credit. Keep credit accounts open and in good standing. In general, running up credit card bills is Bad Plan Theater. If your plastic is what’s standing between you and homelessness, reconsider your position. If you expect to be able to resolve your financial crisis within six months, charging some expenses might be a better plan than tapping retirement accounts.

  • Know your options. Do you have friends and family you could stay with in a housing crisis? Another career you could transition into if you had to? Valuable Stuff you could sell?

  • Be ready to learn. If you find yourself in a financial crisis, you’ll be running a maze of social services at a time when you’re likely to be exhausted and stressed. Being on top of the organizational and financial strategies I mentioned above will not only make you less likely to need these services, it’ll make you better prepared if you do.

If you’re partnered, it’s probably a good idea to talk over a family disaster plan with your better half. You know, before you’re living in an actual disaster. These conversations always go better when they’re hypothetical.

Making an emergency plan was a bit like making a will; we had to think about what would happen to our kids, our stuff and our estate should we suddenly be unable to care for it. It was no fun, I hope to never need it, but I’m glad to have done it. For more tips on emergency planning, check out Philip Brewer’s article on Wise Bread.

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