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3 Steps to Being Prepared for a Home-Related Tragedy

Posted By Christine Brackel On June 21, 2012 @ 12:54 pm In Home Improvement,Homeowners Tips,Insurance | 2 Comments

3 Steps to Being Prepared for a Home-Related Tragedy - Quicken Loans Zing BlogNo matter how diligent a homeowner you are, things will sometimes happen that are outside of your control. Maybe your basement floods, or your water-heater breaks, or a tree falls on your roof; we can’t always know how or when these things will happen. The most important thing to do is to take steps to be prepared so the unexpected doesn’t disrupt your life too much. If you are prepared for the worst, no situation will break you. Here are three steps you should take to be prepared for a home-related tragedy.

Routine Maintenance – Inspecting your home on a regular basis is one of the best ways to nip home problems in the bud. If you get into a regular routine, you’ll find that the work is relatively easy and not very time-consuming. From checking fire detectors, to inspecting washing machine hoses, SixWise has a great list of home maintenance jobs that everyone should be doing. If you follow these, you’ll be able to catch major problems BEFORE they blow up.

Insurance – Homeowners insurance is a must-have. Your home is one of your most valuable assets, so why wouldn’t you want to protect it? You need to have enough coverage to rebuild if it’s damaged by fire or natural disaster. In many instances, homeowners insurance is compulsory to protect the lender’s investment.

Since homeowners insurance is so important, it makes sense to seek professional advice when you are shopping around for the best coverage. Real estate agents are excellent sources of information when it comes to homeowners insurance. You might also want to ask an experienced real estate attorney, who can offer suggestions on buying the right policy for you, in conjunction with local laws and policies.

Emergency Fund – It’s important to create an emergency fund to protect your finances in the event of an unexpected disaster. It’s a pretty simple concept and an absolutely essential component for every financially responsible adult. An emergency fund can protect from more than just expensive unforeseen home repairs; it’s a smart thing to have in case you lose your job, become unable to work, or have some sort of family disaster.

So how much money should you stow away for emergencies? Well, According to Mint, you should keep it at a minimum savings of three to six months worth of basic living expenses. In some cases, this is just not feasible, because that is quite a large amount of money. In those instances, it makes more sense to pick a smaller, fixed amount between $1000 – $3000. It really depends on your personal budget. If you’re single, for example, you might need to save less than someone with a family and dependents.

There are several steps you can take to start building an emergency fund. Here are some ways:

  • Start saving right away. Once you’ve paid your living expenses for the month, put the extra money away for your fund.
  • Cut down expenses temporarily. If you’re having a problem finding spare dollars to funnel into your emergency fund, skip the extras that you are used to until you’ve saved up your goal amount. For example, go out to dinner less frequently, and don’t treat yourself until your emergency fund is good to go.
  • Keep funds in a liquid account. You don’t want to have to wait a week to access the money if you need it right away. Keep it in a checking or savings account so you won’t have problems.
  • Be careful not to make it so accessible that you are tempted to use it for other things. Know that your emergency fund is for emergencies only, and don’t be tempted to spend it while on vacation or out with friends.

Whether you have a home fire, a sump-pump leak, or problems with your washing machine, you want to be prepared for all situations. Following these steps can mean the difference between a high-stress situation coupled with financial problems, and one where everything is taken care of. Preparedness is the key to low-stress homeownership.

 


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