How To Keep A Cash Reserve After Buying A New House

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.

A cash reserve fund should be able to cover at least 3 to 6 months of your living expenses, in case you go without a job on hand or some other situation warrants that you spend all the money.

The ideal thing would be to invest this money into a short-term mutual fund. This has dual advantages for you. You are tied up for short term keeping your cash in near liquid asset. Secondly you earn higher interest than keeping it in a savings bank account.

Of course now with mortgage payments and monthly expense it might seem impossible to set aside cash for the surplus emergency fund. But then you would have to cut corners everywhere and save every penny to make this happen.

It is quite normal that we end up spending on unbudgeted expenses like car repair, medical bills, travel etc. While many of these cannot be avoided, you still have other areas where one can postpone expenditure and diver the saving to build the reserve fund. You do not have to invest money into re decorating your new home right way. You can postpone the same for next year and save up on that money.

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.

House-proud people often wish to keep their homes spot less and in top condition. They do not mind spending money on every small repair when they see a small crack or a flaw.

The need of the hour to day is to save up every penny and live within your means and budget. For this you would have to postpone all your grand plans for your home for now. Of course as your income increases and when you are able to afford, you can plan to do up your home.

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