Homeownership Guidance, Advice and Blogs

As the Director of Affiliate Relations at HomeFree-USA, I’ve always been fascinated with how people handle their money. Like everyone else, I’ve had my financial ups and downs. In fact, it took me 32 months to pay off $32,000 in credit card bills and build up a six-month emergency fund. While that was a very difficult period, I am grateful – and wiser -- for the experience.

Through my personal experiences and working at HomeFree-USA, I’ve gained a ton of insight that I feel compelled to share. You’ll find those lessons here. Feel free to take the thoughts and ideas that resonate with you most and put aside the rest for later. I look forward to sharing my journey.

How to determine if it's really an emergency

Every time the seasons change, new expenses crop up. This Spring, the air conditioner in my car only blew hot air. Some of my clothes from last year no longer fit. It was time to plant flowers, and my grandmother passed away so I had to unexpectedly take time off work and spend three days in Florida (think hotel, rental car and meals out.)

All of these things are important, but which are urgent enough to take from my emergency fund?

In my case, it really should be none of them but the one that comes closest is Nana since her death was unexpected and I had to be there. Here are a few ways you can tell if it's time to tap that savings:

1)  Emergency. There's no way you could have predicted this expense. Examples are a loved ones untimely passing, losing your job, or an unexpected accident which creates medical expenses. In incidences like these, feel free to tap into your emergency savings sparingly and with a plan to replace the money as quickly as possible.

2)  Time sensitive and important, but not an emergency. These are things that you may have to handle as soon as they arise, however they were bound to happen and thus should not be considered emergencies. For example, Christmas comes at the same time every year. You can plan for it, so it's not an emergency. It's also not time to use a credit card that you can't pay off at the end of the month. Get a side job. The same goes for back to school clothes and supplies, seasonal repairs on a home or car, or getting your hair done for that big job interview. Stop it.

3)  Important, not necessarily time sensitive. You may have a strong desire to give to your church or favorite charity before the end of the year (tax write off,) but you genuinely don't have the money. Even if it's for the right reasons, this is not the time to take from your savings. Consider small contributions from your checking account throughout the year instead.

4)For your highest and best good. There are times where you'll hit the wall and can only grow by investing in something that isn't free. That could be as expensive as education, or as little as a trip to the movies which isn't really cheap these days. Regardless, urgent plus important does not equal emergency. Work on finding affordable options and/or saving for it throughout the year.

And so it is.