So after speaking to my friend about buying a house I decided that one of the next steps I should take after becoming debt free was to look towards purchasing a home.
To this end I have started the House Down Payment Fund in ING and it is being funded concurrently with my other funds. The other sub accounts that I have in ING are as follows
- Emergency Fund
- Never Go Back To Fresno Fund
- Car Fund
This fund takes care of life’s little (or big) emergencies so that I am not strapped for cash and I do not have to put items on my credit card that I am not sure that I can afford. This can take the form of anything from my windshield breaking to an unexpected medical bill that I was not prepared for. Having an emergency fund means that I can hopefully take care of things without the need to break the budget in one month because I have the money available in a savings account. Common advice is to have 3 to 6 months of living expenses in your fund and I currently have two months worth so I still have some work to do.
Never Go Back To Fresno Fund
This fund is basically my F U Fund for life. It is being built up to ensure that I don’t have to go back to where I came from because that was not a very happy place for me. It is sort of an extended emergency fund but it will be used for daily living if I am out of a job. This fund will need to have a considerable number of months of living expenses saved up. I am slowly adding to this fund every month and once I have three months of expenses in the emergency fund I will add a little more to my Never Go Back to Fresno Fund.
This fund was started as a joke when I fell in love with a Lexus while still paying a car loan on my current vehicle. I managed to pay off the car in full and decided to keep ‘paying’ the loan amount into an account in order to save up for my next vehicle, regardless of what it was.
I am a long way from getting a house right now especially since I do not know where my next job will be. I have still decided that I can cut a little bit from my spending budget and put it into my saving budget and call it my House fund for now. At least seeing that there is a growing account will provide the motivation that I need to put more money into it in the future when I actually have more income.
I am tweaking the budget once again in order to reflect this change and will begin saving for my new home in May 2011 via small, automatic transfers in ING to a sub account.
How did you start saving for your house?