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Our Story: Both my wife and I are 27 years old and have gone through financial hell and back. Now we are on track to financial freedom, however we are not financial advisors or professionals, just everyday people. Share our journey from a negative networth and email us if you have questions or comments! :)



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Sunday, December 11, 2005

Emergency Funding

We are enjoying our new found freedom due to the refinance and dumping most of our savings into paying down the mortgage for the refinance. Our current mortgage equals $82,658. New Mortgage on the refinance paid down to $75,000 even. We have trashed our $13,500 savings and put $7,000+ towards paying the refinance and the remaining $5,000 we are using as our own personal savings. Now a couple days ago, I was in a quandary in which I had $5,000 cash in my hand after taking out of the checking account. I placed it in an envelope and stuck it in a safe place (not earning interest). I have made an "emergency fund".

The Emergency Fund. I plan on not touching the fund and thought, well if I'm not going to touch it but I want its liquidity, I might as well take it as cash. Then I thought wouldn't it be better if I put it in a money market account with checking priviledges?? I mean it might as well be safer than sticking it in a safe place, right? Well thats the point where I am in the emergency fund. The spouse wouldn't mind the emergency fund being bigger. I think 6 months worth of expenses, which means approximately $10,000 should be enough. Im guessing thats the amount that would make me feel safer too. Emergency funds are meant to be SAFE and LIQUID. Period. From a personal standpoint, I'll never be satisfied with an emergency fund because I'll never feel comfortable with a certain amount..... As I'm writing this I'm deciding to do an exercise.

Monthly expenses are as such (minus IRAs and Savings contributions): - $975.00 total. Approximately $1000. So if we were to both lose our jobs, $6,000 should be enough. At the worst we can always throw ourselves into the depths of hades, ie: credit cards, 2nd mortgage. I say when we are at our worst moments, I DO NOT want to have to dig deep or put any more money into debt. Why? Because deep down it scares me to have to lose the house or to find my family living on the street somewhere. $6,000 doesnt cut it in real life. I have to figure that $20,000 should be enough AFTER all debt has been paid (monthly at that time will drop down to $500). The emergency fund should sustain for more than 2 years with a family.

Our next worry... purchasing our 2nd home.

32 Comments:

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9:06 AM  
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2:51 AM  
Anonymous Anonymous said...

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8:28 AM  
Anonymous Anonymous said...

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11:43 PM  
Anonymous Anonymous said...

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2:41 PM  
Anonymous Anonymous said...

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3:25 PM  
Anonymous Anonymous said...

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2:08 AM  
Anonymous boca raton said...

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10:39 PM  
Anonymous boca real estate said...

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10:59 PM  
Anonymous Anonymous said...

watch "absorption rates" closely. It's a time-tested yardstick for home sales. Does it prove that the Housing Bubble has already popped? You bet it has. Read more ....

9:57 PM  
Anonymous Anonymous said...

Already into another hurricane season in Florida. Starts in June. Not sure how it will effect my real estate work. Tough business right now. So I enjoy taking a break and seeing what other people are up to. Enjoyed visiting your blog. Visit my site if you have a chance.

2:14 AM  
Anonymous Anonymous said...

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9:43 AM  
Anonymous Anonymous said...

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1:20 PM  
Anonymous Anonymous said...

Someone knows how to bring a lot of into your home, over a single weekend. Opportunity attracts them. Emotion captures them. Competition excites them. Their wallets open. Top dollar for your home pops out in an open bidding process that concludes on a single Sunday afternoon .

11:52 PM  
Anonymous Anonymous said...

Here's the home buying process into a single weekend. She does it by compressing the real estate marketing budget into a much tighter timeframe than normal .

1:37 AM  
Anonymous Anonymous said...

watch "absorption rates" closely. It's a time-tested yardstick for home sales. Does it prove that the Housing Bubble has already popped? You bet it has.

9:54 PM  
Anonymous Anonymous said...

Hint #10 for . Arrange Bedrooms Neatly: Remove excess furniture. Use attractive bedspreads and window treatments, with freshly laundered curtains if you use them.

11:53 PM  
Anonymous Anonymous said...

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1:07 AM  
Anonymous Anonymous said...

Hint #11 for . You Can Sell Pride Of Ownership. Cleanliness counts. Potpourrie works. So does a nice-smelling stew simmering on the stove. Happy buyers often tell us: "I liked the smell of the home." And you'd be surprised how many people walked away from a "perfect" home because "the owners were smokers."

1:40 AM  
Anonymous Anonymous said...

Nice blog you have. Been looking for a good real estate blog to help me struggle through this difficult market. We've developed a unique approach to tough housing markets. Might interest you and your readers. Thanks again for an interesting site.

11:25 AM  
Anonymous Anonymous said...

Hint #7 for . Safety First: Keep halls and stairways clear. Avoid cluttered appearances and possible injuries

8:40 AM  
Anonymous Anonymous said...

Blog-hopping is a habit I am trying to break since my own real estate work requires a lot of attention to detail. Then I run into a blog like yours and I�m reminded about how the internet expands our views positively. Thanks for the read. Visit my site if you have a chance.

10:01 AM  
Anonymous Anonymous said...

Hint #6 for . Clutter will clog a sale: Display the full value of your space by removing all unnecessary articles. Consider storing things you don't need all the time.

10:24 AM  
Anonymous Anonymous said...

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10:04 PM  
Anonymous Anonymous said...

The average home is currently on the for about 4 months before it goes to contract. Around 15% of initial real estate contracts never make it to a successful closing ... something goes wrong, and the frustrated seller puts the home back on the real estate market .

2:31 PM  
Anonymous Anonymous said...

Someone knows how to bring a lot of into your home, over a single weekend. Opportunity attracts them. Emotion captures them. Competition excites them. Their wallets open. Top dollar for your home pops out in an open bidding process that concludes on a single Sunday afternoon .

4:28 PM  
Anonymous Anonymous said...

Surfing for information on real estate, and I stumbled across your blog. Interesting work. Good read. Visit my site if you have a chance.

11:06 PM  
Anonymous Anonymous said...

Been looking for compatible real estate sites, and I guess your site doesn't quite fit. Still, I did enjoy the visit. Stop by my site if you can.

8:38 AM  
Anonymous Anonymous said...

. Noise does not sell well. Let the Realtor� and buyer talk, free of disturbances. Background "soft playing" music is okay, but the wrong sounds will turn buyers off. Noisy children and animals are roadblocks to a contract � and traffic, trains, and planes must be dealt with honestly, if they are part of the deal. Go here for more ideas.

11:29 PM  
Anonymous Anonymous said...

. Be It Ever So Humble: Never apologize for the appearance of your home. After all, it has been lived in. Let the trained agent answer any objections. That's the job of your Realtor�.
Go here for more ideas.

12:40 AM  
Anonymous Anonymous said...

Even if you sell your home "as is, subject to inspection" � you can do a lot to . A top-notch Realtor� will probably hand you a list of at least a dozen things you can do to help improve your sale. If they don't, well, maybe you need to .

1:06 PM  
Anonymous Anonymous said...

This comment has been removed by a blog administrator.

2:04 PM  

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