House Hunting

I recommend using a real estate agent to help you find an apartment.

Always view the actual apartment that is listed as being for rent.

You will pay the first month’s rent, a security deposit, and real estate office fee upfront all at once.

Refrain from telling the real estate agent that you collect SSI or SSDI as your sole income source. People have done that and were told that no apartments were for rent.

In a book I’m writing I go into this in detail.

The idea is to have eight months’ of living expenses socked away in an emergency fund.

If you ask me a person who owns a co-op or condo apartment should have at least $30K in an emergency fund. A person who owns an actual house should have at least $75K in an emergency fund.  A person who rents an apartment should have at least $10K in an emergency fund.

This makes sense because renters often have to change apartments. Thus you can use part of your emergency fund for the upfront housing costs.

How do you get an emergency fund? You “Pay yourself first” out of every paycheck or whatever kind of check you get each month to live on. The term “pay yourself first” signals that before you record any bill payment or other deduction in your account, you debit the amount of money you’re saving for an emergency.

If you have a job and get direct deposit, you can pay yourself first by automatically depositing a portion of your paycheck into a savings account. You can deposit the remainder into your checking account to live on.

The amount of money in an emergency fund should be linked to the cost of living where you live, how long it might take you to find another job if you’re laid off, and what your housing and other costs are each month. You should factor in the cost of COBRA health insurance premiums if you lose your job and have to buy into your health plan.

I’m amazed when I meet a person who hasn’t ever heard of having an emergency fund or what the term “pay yourself first” involves. Now you know if you didn’t already.

Bari Tessler recommends calling an emergency fund a “peace of mind fund.” I like the term peace of mind fund better.

This fund should be easily accessible and held in an FDIC-insured account so that you’re guaranteed access to the funds should there be a “run on the bank” or the bank fails.

I’ll talk next about creating a six-week action plan for finances.

Advertisements