- Danielle Desir bought a house in her twenties and “hacked into the house” to pay her mortgage and achieve her other financial goals.
- She soon noticed that her house was eating up her savings with one-time emergency expenses.
- Now she keeps at least $1,000 in a home emergency fund specifically for these expenses.
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Entrepreneur Danielle Desir didn’t want to choose between paying off her student loans, traveling to 27 countries and buying her first home – so she did it all before she was 30.
Desir comes from a household of women who valued personal finance. “My mom is an accountant. My grandma is a group saver,” she told Insider. Her family thought it was important for Desir to get a head start financially, so they helped her open her first retirement account at age 15 and invest in her first mutual fund at 17 years.
To save money after college, Desir moved back in with her family. She was grateful for their support, but was looking forward to buying her first home. Once she saved up enough money for the down payment, Desir closed a four-bedroom house in Connecticut.
Desir tells Insider that she “hacked into her house,” asking a few roommates to rent out the rooms so she could make monthly mortgage payments while meeting her goals of traveling and paying off student loans.
‘House-hacking’ allowed him to build up an emergency fund for his home
Like other first-time buyers, Desir was surprised by the random expenses eating into her savings. She had to replace the fuel tank in her old house for $3,000. At one point, there were huge wasp nests in her garden and Desir had to pay hundreds to get rid of them.
“A lot of things went wrong when I moved in,” Desir says. “I had repairs to do. It was just anticipation of new bills that I didn’t even know were coming.” Having an emergency fund just for her home gives her peace of mind that she can take care of her home on short notice.
Typically, an emergency fund refers to three to six months of living expenses kept in an easily accessible high-yield savings account to use in an emergency. Along the same lines, a home emergency fund is a savings account specifically designed for home-related emergencies.
Desir keeps at least $1,000 in a home emergency fund
Apart from things like the fuel tank which badly needed fixing, Desir also had ambitious plans to renovate and modernize parts of his house. She had to be careful not to dip into her house’s emergency fund to make these renovation efforts, even though it was tempting.
The house emergency fund is only for emergencies and things that need occur in order to keep the house livable. For example, buying a new faucet on a whim for cosmetic reasons is not an emergency, but hiring a plumber to fix a leaky faucet that may cause greater damage to the home can be funded from the fund. home emergency.
Desir says, “I started my house’s emergency fund with $1,000 so that if anything happens, I have something to pull out.” Now that she’s had a few years to tweak her system, she’s taken it up a notch: her home emergency fund remains at $5,000.