Author Topic: How do you come back from a major financial setback?  (Read 9767 times)

NW Girl

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How do you come back from a major financial setback?
« on: December 23, 2013, 02:51:30 PM »
Our sewer line is broken to a cost of $31,000 ... today.

We have been so careful with our spending, working so hard to reach our goals and this feels like a major blow.  I can barely breathe right now.

I should be grateful we have no debt (besides the mortgage) and we can pay for it out of savings, but I am just reeling.  At the moment, it feels like all of the "little things" we have done to keep our expenses low are meaningless.

How do you come back from these types of setbacks? 

marty998

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Re: How do you come back from a major financial setback?
« Reply #1 on: December 23, 2013, 03:14:57 PM »
Broken on your property or where it joins the street? Would you be able to contact your local water authority to see if they are liable for some of it?

If it is relatively new do you have recourse to the plumber who installed it?

Would your home insurance cover it?

Just some ideas...

RE: recovering from the setback.... yes you will go through a phase of bitching and moaning and the world being against you. I went it through it 5 years ago. Just stick with your plans and continue on, remember that all of the "little things" have allowed you to deal with this better than you would have otherwise.
« Last Edit: December 23, 2013, 03:20:42 PM by marty998 »

Greg

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Re: How do you come back from a major financial setback?
« Reply #2 on: December 23, 2013, 03:15:35 PM »
That's an awful lot for a sewer line... can you do any of it yourself?  Backhoes are fun to operate.  Usually it's just about digging, repairing a pipe, and filling the dirt back in.

Consider contacting your insurance to see if it's covered.

Peony

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Re: How do you come back from a major financial setback?
« Reply #3 on: December 23, 2013, 04:17:41 PM »
Any way the expense might possibly be tax deductible?

lentilman

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Re: How do you come back from a major financial setback?
« Reply #4 on: December 23, 2013, 04:42:43 PM »
Did you get multiple bids?  As other posters have said, $31K sounds very high.

NW Girl

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Re: How do you come back from a major financial setback?
« Reply #5 on: December 23, 2013, 08:14:05 PM »
Whoops...I meant to post this under 'Ask A Mustachian."  Not sure what happened. 

Yes, we got a couple of bids, although it was a bit of an emergency to get it cleaned up and fixed.  We went with a slightly higher bid because they offered a 10 year guarantee on that line.  We live on a city street with old sewer lines but in new construction. We had to get city permits, traffic rerouting, the whole thing which upped the cost.  I didn't think of this possibility when we moved in.  Overall, I think we did the best we could under the circumstances.

Peony, I checked to see if it would be tax deductible.  Thanks for the suggestion, but it is not.  If it was a rental, it would be.  It definitely isn't going to be paid for by our insurance because the pipe broke off the foundation. Marty 998, I am going to double check with our local water authority, but from what I read on the website, it doesn't look hopeful as the break is not along the main line, which is all they are responsible for.

Thanks for your suggestions and support.  I know there are worse tragedies in the world.... we will survive this!


Jamesqf

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Re: How do you come back from a major financial setback?
« Reply #6 on: December 23, 2013, 09:20:06 PM »
Are you sure it's not deductible as a casualty loss?  From your description, it sounds as though you have a case that it is.  See e.g. http://www.irs.gov/taxtopics/tc515.html

NW Girl

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Re: How do you come back from a major financial setback?
« Reply #7 on: December 23, 2013, 10:38:48 PM »
Thanks for the link, Jamesqf!  I will look into it further.  I just did a cursory search, so I appreciate the heads up!


CanuckExpat

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Re: How do you come back from a major financial setback?
« Reply #8 on: December 23, 2013, 11:19:54 PM »
You could see this as a setback, but really it is a vindication that you are doing things right.
Shit happens (hopefully not literally in this case), and you were able to take it in stride.

Ultimately, this is what savings and emergency funds are for. Imagine how bad the situation would have been if this had happened and you didn't have funds to cover it.

Indio

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Re: How do you come back from a major financial setback?
« Reply #9 on: December 24, 2013, 05:39:07 AM »
My water comp is always trying to sell me insurance for the sewer line so i looked into it. they are responsible for everything in the street. I think that is some kind of law because street is public property. Im only responsible for the driveway to the house.
A few years ago they told me they heard a leak in the water pipes in the road and said it was at my house. Turns out it wasn't. I guess if i hadn't pushed back they would have tried to charge me for it. I have a pressure gauge on my main house water line and the water pressure was just fine.

Allen

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Re: How do you come back from a major financial setback?
« Reply #10 on: December 24, 2013, 04:26:44 PM »
Don't focus that your low cost living and saving were 'wasted', you are still as far as ahead as a wasteful family in the same situation, except they wouldn't have been able to pay it out of savings - they would probably put it on credit cards, or not be able to afford it at all and just had to do without or go bankrupt or something. 

Never doubt for a second that this emergency (which is why you have an emergency fund that is letting you weather this) wasn't a good idea.

eyePod

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Re: How do you come back from a major financial setback?
« Reply #11 on: December 25, 2013, 10:00:52 AM »
That blows.  The only thing I can think is imagine if you were spending each paycheck and not saving at all.  You'd have to put it on a credit card and then you'd be F'd.  So basically, you're in a shitty situation (no pun intended), but it could have been a LOT worse.

arebelspy

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Re: How do you come back from a major financial setback?
« Reply #12 on: December 25, 2013, 10:20:02 AM »
Sorry that happened to you.  That sucks.

Regarding "coming back" there's two things I think are helpful.

The first is what others have pointed out - think about how much worse off you'd be if you hadn't been doing things right, and you couldn't handle this problem, and be grateful you've been doing things the way you have.

The second is to think about your two choices going forward.  You can give up on frugality and such because random shit can pop up and undo some of it. Or you can continue with your efforts despite some potential setbacks that can, and will, happen.  Once you've thought about those two alternative choices, ask yourself: which will lead to a better, happier life?

The choice to move on past this will become clear, I think.
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SwordGuy

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Re: How do you come back from a major financial setback?
« Reply #13 on: December 25, 2013, 01:18:32 PM »
I know this kind of thing is really annoying, that you feel like all your hard work got undone.

The simple truth is that, over the course of a lifetime, there will be a number of dammits like this one.  You chose to be prepared for it, most people do not.  You'll curse and grumble about it, but you'll continue to move ahead. 

It does get better over time.  I don't mean that disasters don't continue to happen, just your ability to deal with them.

Many years ago we had a year where my wife had an operation, my daughter had an operation, my son got into legal trouble (so we had lawyer's bills), both cars died, and the refridgerator died.  It took three years of hard work to recover from that string of problems.

This last year, my wife went to the emergency room in an ambulance, my daughter went to the emergency room in a different ambulance, I missed work (and pay) because I was ill so much, someone hit our parked car and two trees fell on the house.  Naturally, all this happened after my wife and I had overspent on a vacation trip.  It only took 6 months to pay it all off, and we were able to do it without really breaking a sweat.   (We could have paid it off immediately but I didn't want to pull money out of investments to do it.)


Argyle

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Re: How do you come back from a major financial setback?
« Reply #14 on: December 25, 2013, 11:20:27 PM »
Of course this is not a happy event.  But some folks spend that much every year, on silly luxuries they get nothing out of.  This is a one-time deal and now you have a sewer pipe that will last ten years and probably as long as you own the house.  You are still way, way ahead of extravagant families.

Letj

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Re: How do you come back from a major financial setback?
« Reply #15 on: December 26, 2013, 05:19:42 PM »
Oh my goodness.  You're being taken to the cleaners.  Our sewer line broke and my husband hired 3 day laborers to dig for 3 days and replaced the pipe himself.  All in all, it cost us about $1,500.  Alternatively, we could have rented a baku to do the digging.  Do not spend that type of money; that's outrageous.  We've also replaced water lines and sewer lines at our rentals for less than $2,000.

Mori

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Re: How do you come back from a major financial setback?
« Reply #16 on: December 31, 2013, 09:51:26 AM »
I know in our city we have a lateral line tax on all houses connected to the sewer because most houses were built with ... Orangeburg pipe ... I think. So the city insures everyone by taxing everyone. :) If something like this happened I think I could claim with the city. Maybe you have something like that in your town?

TrulyStashin

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Re: How do you come back from a major financial setback?
« Reply #17 on: January 01, 2014, 08:26:16 AM »
Oh my goodness.  You're being taken to the cleaners.  Our sewer line broke and my husband hired 3 day laborers to dig for 3 days and replaced the pipe himself.  All in all, it cost us about $1,500.  Alternatively, we could have rented a baku to do the digging.  Do not spend that type of money; that's outrageous.  We've also replaced water lines and sewer lines at our rentals for less than $2,000.

You likely live in an area that is less expensive.  OP indicated that her repair involved city permits and traffic detours.  The repair also likely disrupted other urban infrastructure that she had to pay to repair (sidewalks, curbs).   It seems to me that they were diligent in getting quotes under an emergency situation and handled it well.

OP, you've got the right habits and you're resilient.  You'll bounce back faster than you think.

Life sure can be hard sometimes.

AlmostIndependent

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Re: How do you come back from a major financial setback?
« Reply #18 on: January 01, 2014, 02:51:37 PM »
I had something very similar happen at one of my rental properties. I pushed my insurance company and got them to cover the loss. The key words when you talk to them are "sudden," "accidental," and "damage." It's likely they will tell you "no" initially but read your policy and push them a bit. You might be surprised. At $31,000 it will be well worth your time to give it a shot.

Even if you don't get anything back from the insurance company keep your chin up. Everyone has setbacks. I've certainly had my fair share, and some big ones at that. You didn't have to put it on a credit card, I know it's a small victory, but still very badass.

RetiredAt63

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Re: How do you come back from a major financial setback?
« Reply #19 on: January 05, 2014, 06:26:02 AM »
Houses cost money in hidden ways.  You had your sewer pipe.  Many years ago we lost our well pump at the beginning of the Easter long weekend.  Pump was 220' deep - two guys (double time), backhoe, big truck to winch the pump up, new pump, wires, rope, torque arrestor (not on the original pump, which is why it went), bleach, and we had water again.

slugsworth

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Re: How do you come back from a major financial setback?
« Reply #20 on: January 10, 2014, 09:24:51 PM »
This may be cold comfort, but if you live in WA, the sales tax on the renovation can be itemized on your federal return. It could be worth a few hundred on your return.

I had a 40' side sewer connection about 5 years ago and can sympathize. I ended up doing the liner rather than digging up my neighbors yard.

needmyfi

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Re: How do you come back from a major financial setback?
« Reply #21 on: January 11, 2014, 07:53:01 AM »
Lost everything in Katrina except one truck, a camper, $120,000 of insurance on our paid off house and our savings of course:). Our area was the very last to reopen-almost 4 months later.Lost all contents of our home, our incomes (self employed), our rental income, our car and most importantly our health insurance.Then made alot of very bad decisions -bought two houses at the height of the real estate bubble, needed gall bladder surgery, actually could go on

You know-we are here, we are healthy.  have warm beds and full bellys' I can still work.  I am no longer making $80k in engineering, I make $20000 a year in my dream job-that is worth a stash of $500,000 and have health insurance to boot We just now back to where we were 8 years ago

Life goes on

beanlady

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Re: How do you come back from a major financial setback?
« Reply #22 on: January 11, 2014, 12:21:30 PM »
I'm feeling the same way, having just lost $75,000 in a divorce, and I only make $35K. I'm trying to look forward instead of back, but it is hard to let go of the plans and ideas I had for what that money would do for me, and tough to imagine rebuilding it again. One thing that has helped has been to focus on specific future goals and next steps to distract myself from what I have lost.

TomTX

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Re: How do you come back from a major financial setback?
« Reply #23 on: January 11, 2014, 06:05:42 PM »
Definitely push your insurance.


PantsOnFire

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Re: How do you come back from a major financial setback?
« Reply #24 on: January 12, 2014, 09:22:00 AM »
Reminds me (painfully) of our start to 2013.  Bought a new house, hitting our savings a bit to do so.  Two weeks after moving in, had to replace the sewer line.  Not nearly as pricey as yours (we're only 32' from the curb) but it killed most of our incidental move-in budget... furniture, minor repairs, etc.  Then came baby (two weeks later.)  Then came the unpaid furloughs from work (two months later--BOTH of us.)  Then came the notice that our work's daycare was unexpectedly over capacity (military families get top priority and they bumped us down the list) so we've had to pay $600/month more for daycare than we originally budgeted. 

We made some sacrifices, like having our second bedroom converted to a makeshift garage/storage area.  (We were going to build a garage ASAP after moving in, but the sewer bill, furloughs, and daycare SNAFU ate up all that money.)  We're doing the best we can to make the visible parts of the house look decent while trying to hide the squalor upstairs and pretend it doesn't bother us.  Having a new baby in the house is stressful, time-consuming, and expensive, but he keeps us sane and brings us so much joy that at the end of the day I don't really care about all the other stuff.  So far, we haven't had to borrow, although our savings can't really take any more big hits before that becomes necessary. 

You are doing things right.  Definitely leave no stone unturned in trying to defray some of the sewer line cost, but keep in mind that as long as you continue to practice fiscal responsibility, you will be better off than 99.9% of people that get dealt the same bad luck.  Over the long haul, you will be better for it, and you now have even more incentive to value a good strong savings buffer. 

We were SOL on getting any of our sewer replacement costs defrayed.  It was a 60 year old terra-cotta pipe... they are expected to fail in that timeframe.  The seller was a lawyer and while they likely knew something was up, they didn't have any work done on the house so it's unlikely there was a paper trail proving they were aware of the problem.  Home inspections don't cover buried pipes.  Insurance doesn't cover it in our case because it's just "worn out" and we all knew it would happen sooner or later.  I was just hoping for at least a few months or years before we had to bite the bullet. 

However, you said you have new construction... that's a whole different ballgame.  I can't think of a good reason why any sewer line put in after the 1980s or so should have failed by now.  Terra cotta hasn't been used in decades as far as I know.  Cast iron should last 40-100 years.  PVC is often quoted at 100 years+.  I would think you are looking at improper installation, materials, or some external factor like nearby excavation or a geological event.  In any of those cases I think you'd be able to go after the builder, or insurance. 

The important thing is that you were able to get the shit flowing away from your house without going into the red.  Now you can sort out the rest while being able to shower and take a dump whenever you feel the need.  Don't discount that. 

StPaulCityGirl

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Re: How do you come back from a major financial setback?
« Reply #25 on: January 14, 2014, 12:22:05 PM »
PantsOnFire is right - there is no reason the pipe should have failed at the house if the house were newer. My neighbors failed and it was built in 1925 so, that I can see. I would dig deeper into the builder responsibility/warranties, insurance, tax break, any and all of it. And pay for the extra rider on sewer back-up on your insurance (if they offer it) going forward - that has saved me TWICE to the tune of at least $10K. A tree fell on my house in 2012 when I was unemployed. My frugal living/savings allowed me to pay the part that wasn't covered by insurance with no set-backs. You are doing things right. Bad things do happen to good, frugal people. Don't give up - after all, it's only money in the long run, and money isn't what brings us happiness.