Homeownership is different from renting in that all expenses are the owner’s responsibility. When you rent, the landlord handles repairs and other issues for you. Those that own their own home must realize storing some money away for a rainy day is essential.
Savings for the Unexpected
Homeowners must be realistic and keep a little savings that is designated for the repairs, maintenance and needs of their home in the form of an emergency fund. Rainy days will come at some point and being prepared will help your stress level, bank account and home.
We don’t want to think about bad things happening, but should consider the possibility. Here are a few examples of the unexpected that can alter your financial situation quickly:
- Job loss
- Tragic injury
- Death or birth in the family
- Need for a new vehicle
- Costly home repairs
Be sure you have set aside some savings to weather the storm of potentially difficult situations and expenses.
Suggested Emergency Fund Amount
Financial experts suggest homeowners have three to six months of their total monthly bills in savings. This is the amount they say to not touch unless an unexpected emergency comes up. Responsible homeowners plan ahead and store up a little nest egg of savings in their bank account.
If you think that saving up several months of an emergency fund seems impossible or a daunting task, then set a budget to begin saving gradually. Every little bit helps and you’ll be able to watch your savings grow over time. When difficult circumstances come up, then you’ll need to dip into your emergency fund and you’ll be glad that it’s at least started if not already fully funded.
Help is Available
If you find yourself in a situation where you need funds quickly then try to be resourceful and start making calls for help. Call creditors and ask for extensions or payment plans with your bills. Don’t sit back and wait for things to work out but rather be proactive and take initiative.
An emergency fund is a wise way to ensure you’ll be able to pay your mortgage and make timely repairs for your home. Plus, you’ll have a greater peace of mind just knowing you are able to take care of your home, family and finances more easily. While homeownership requires a major financial commitment, it is well worth it.