Most of us who buy our new home and move in would have spent all of our savings down to the last penny and borrowed money on top of it. We would have used up the entire emergency reserve fund we would have kept aside. On settling down at the new place, putting together the new emergency reserve fund should be our priority.
Normally it is advisable to keep aside at least 3 to 6 months of total living expenses as surplus cash reserve to be used in emergencies or unforeseen situations like having to go without a job etc.
Inventing such emergency fund into a mutual fund might be the best option for you. It has twin advantages for you to consider. Your first need would be to keep the cash in short-term investments so that you have easy access to the same. Secondly you can get higher rate of interest and returns when compared to saving accounts.
Keeping aside money for building this reserve will not be easy. You might be stretched out with having to pay the premiums and other expenses. You would have to tighten you belt and save on every penny to make this possible.
Of course in the normal course of living surprises do spring up now and then and you have no option but to spend money on unbudgeted expenses like car repairs, medical bills etc. But then you can look at avoiding expenditure on home interiors or improvements and divert some savings to this fund.
It is quite natural for people to keep spending on their new home without realizing how much is going into it. You have new furniture to buy, home extension, home repair etc…the list can be endless and burn a big hole in your bank account.
It is quite natural that you wish to keep your home spotless and hence spend money on repairing things as soon as you detect a small crack or a flaw.
For now it is advisable that you put away your plans for home improvement and save up all that you can, living frugally and within your means. Tomorrow when you have more disposable income and higher income you can splurge on all these things.
See additional writing pieces written by this same writer dealing with things including pressure washer nozzles and fire exit signs.
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