Your home is your most valuable asset and one of your most basic needs. It makes sense to plan for unexpected emergencies and to ensure that you are able to keep and protect your home under any circumstance. These smart financial planning choices will protect your home no matter your financial situation.
Home Savings
You saved and saved to purchase your home, but the savings shouldn’t stop there. Keeping your home in top shape and protecting your investment requires promptly tending to home maintenance when repairs are needed. You should save 1 percent of your home’s value every year to dedicate to home maintenance. For instance, if your home was $360,000, you’d need to budget $3,600 per year or $300 per month to dedicate to savings.
Life Insurance
You don’t want to plan for the unthinkable, but most homeowners with spouses rely on that joint income to pay the mortgage and other bills. If your spouse were to die unexpectedly, the last thing you should have to worry about is assessing whether you can keep your family home. Ensure that both partners have life insurance to cover expenses in the event of a tragedy.
Unemployment Insurance
Facing a furlough or layoff is incredibly stressful, particularly if unemployment rates are high in your area. While you will ideally have three to six months of income in your savings, it can be helpful to have a fallback plan in case of an unexpected company downsize. Unemployment insurance will pay your mortgage if you are laid off or fired without cause, allowing you to avoid the risk of foreclosure while hunting for a new job.
Good financial planning can ensure that you will be able to afford and care for your home no matter what life throws your way. It is vital to plan now for whatever the future may hold. After all, your house isn’t just an investment, it is your home, and that’s worth protecting.
