Establishing a reserve

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No one purchasing a home wants to think about losing that home. But the reality is that recessions, layoffs, illnesses, injuries or deaths could dramatically affect anyone’s financial picture with little or no warning.

Once you own a home, you have an investment to protect. After all, you’ve put money down and you have made your mortgage payments each month. The best way to protect that investment is to continue to budget and save.

Experts suggest that you build a reserve of three to six months’ living expenses. Naturally, you can’t save this much money overnight, but you should make it your goal to establish such a reserve as soon as possible once you own a home. This money should be deposited in the bank and be used only for emergencies.

It is very important to continue to keep a budget once you own a home. Keep using the Monthly Spending Planner (.pdf), especially if there is a change in your financial situation. Monitor your monthly bills and use credit cards wisely.