Signing up for homeownership comes with its share of unexpected costs, and once you own property, being good about saving money becomes even more important. Aside from a primary savings account, hopeful homeowners should also start an emergency fund for major home repairs like replacing your water heater, roof, or furnace.
Yep – another giant chunk of change to save on top of your down payment and closing costs. So, what’s a homebuyer on a budget to do? Start with these tips for saving money for those pricey home repair bills and you’ll have enough cash to fill your emergency fund in no time.
Make savings automatic
Tell your payroll department to put a fixed amount of money in your emergency fund every payday via direct deposit. You won’t miss the funds if they never hit your checking account in the first place.
Save your income tax refund
Sure, it’s tempting to blow your tax refund on a weekend getaway or a new pair of Louboutin pumps. But sending all of that cash directly to your emergency fund will get you closer to your goal in less time – and with zero impact on your day-to-day budget.
Use your year-end bonus
The big fat check that comes at the end of the year is always a welcome relief for holiday overspending. However, if you’ve established a good day-to-day budget you won’t really “need” that money to pay your credit card bill. Deposit it straight into your emergency fund.
Save in big chunks
While curbing your morning coffee habit is not a bad idea, saving money in larger chunks will make the biggest impact. Swap this year’s summer vacation for a staycation and give yourself a big thumbs-up for your newly fattened emergency fund.
Contribute less to your 401(k)
When building up your emergency fund, you may want to consider temporarily contributing less money to your 401(k). Just be sure to save enough in order to qualify for your employer-sponsored contribution (matches typically stop at 6%).
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