As I’ve stated here many times before, the real estate market here in Florida is NOT in good shape. Homes are sitting for months without an offer, and many investors who thought they’d be making a quick buck are walking away from the homes they purchased. We’ve got several in our neighborhood that will be sold at a foreclosure sale this month. Too many investors simply don’t have the funds available to continue carrying a house they’re not living in. That reminded me of friends of ours who have the opposite approach - they have 6 months of paychecks in savings in case of an emergency.

It may sound a little extreme, but think about it. What would happen if I lost my job? We’d live off savings and credit cards for a while, maybe I’d be able to find a new job, or maybe not. What would happen if something happened to Jim or I, and we couldn’t work anymore? I don’t think disability and social security would help us much. And what if, god forbid, you lost your spouse? We have wills set up in case something happens, so that the kids are taken care of, but financially, it would ruin the surviving spouse. We may need to look into a revokable living trust and some other trust options to make sure we’re completely set for a worst case scenario. You can actually research quite a bit of this online, with sites like the one created by Morris, Hall and Kinghorn, so that you’ll find out if you’re prepared for the worst.