Things You'll Need:
- money
- savings account
- mutual fund
- good savings habit
- house
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Step 1
Secure adequate homeowner’s insurance. You will need enough on your insurance policy to replace what you own. For instance, you may have bought your home for $100,000.00 but it would take $150,000 to replace it if a disaster happened. You‘ll want your insurance to cover the replacement value of the things in your home too.
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Step 2
On top of your homeowners insurance you will need to sock away funds for emergencies. For instance if you have a leak in your roof because it has gotten old and needs replaced, you’ll want to be able to start work on that right away. If you have saved for that, you’ll be able to.
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Step 3
Start by place money in your savings account, about $100 to $250 a month. Can afford that much? Scrape $25 together the first month and more when you can afford it. Every little bit saved will be that much less that you will have to pay later.
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Step 4
When you have accumulated $500, consider purchasing a mutual fund with that money. It will place the money one step further away from you spending it on non-emergencies but be able to be liquidated if you need it. Ask at your bank, they should be able to set it up with no problem.
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Step 5
If you’re wondering how much to save, ask yourself these questions: How much is your water heater? How much for a new roof? How about your furnace, what does that cost to replace? Anyone of these things can go in a home and you will be responsible for the cost. Rule of thumb: save until you have enough to cover the thing that will go first. That should give you enough breathing room.
