Set aside cash for emergencies.
In homeownership, like in so many other aspects in life, unforeseen events or issues may crop up. While we might not be able to prepare for it fully, we can always take steps to mitigate the negative impacts of such occurrences.
1. Get insured
For many, buying an optional policy, such as health insurance, is often seen as a chore or an additional financial burden. After all, no one wants to fall ill, or worse. Yet, given how healthcare costs could potentially spiral during medical emergencies, having insurance at least ensures that we can see the doctor with ease of mind, rather than worry about whether to pay the mortgage or the hospital bills.
Another policy to consider is mortgage insurance, which can step in to pay the home loan, keeping a roof over the heads of our family, if anything were to happen to us.
2) Sock an emergency stash
While it’s not necessary to keep wads of cash socked away in a biscuit tin, it is prudent to set some money aside for emergencies. It’s recommended to buffer enough money to keep us afloat for six months in the event of retrenchment or a sudden job loss.
This emergency money should cover the mortgage, bills and other living expenses while we’re looking for other employment. As a homeowner, it is also advisable to put some money aside for home repairs and other emergencies like a pest infestation.
3) Make a plan
It’s always good to have a backup plan for whatever might happen. If an unforeseen event were to prevent you from living in your home, such as a fire, what will you do? Call on your family or friends? Get a hotel room? It might also be prudent to think of multiple sources of income, such as passive income from investments, to ensure that bills can still be paid.
Create an emergency phone list, such as your immediate family, doctor, plumber, insurance agent, lawyer etc., so that you have a pool of people to seek the correct support and advice from. If something were to ever happen, just keep calm and execute your plan.
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This article was first published in the print version PropertyGuru News & Views. Download PDFs of full print issues or read more stories now! | ||