The Captain here to discuss finance and life!
I’m buying a house currently and have been learning a lot on the process.
#1 thing I have learned?
HOUSES ARE FREAKING EXPENSIVE!!!!
I haven’t even bought the darn thing yet and I’m already out 2 grand, with promise of another 20 grand at closing.
*queue heavy breathing into paper bag*
I anticipated all this to a degree, but I still find myself being shocked by the sticker price.
Good news is: I have the money to cover this easily (I have been saving up for this after all).
Bad news is: I will need to pull some cash from either my emergency fund or my dividend fund in order to cover some of the unexpected expenses that have come up.
To be perfectly honest, when I began the house hunting journey, I was planning on using my dividend fund AS my emergency fund, thus freeing up $7500 I had in there for house stuff.
Not the best idea by any means, but a perfectly feasible one.
After thinking about selling my car, I did wind up doing so (I’ll post a blog entry about that soon-ish), and managed to add 10k to my house buying plan.
Now seeing just how much stuff I will need for my new place, I’m starting to rethink my emergency fund plan.
On one hand, I hate the idea of selling my dividend funds already. I just got them started in April and have enjoyed reaping the dividends and seeing the fund grow. This makes me want to leave this as my emergency fund and spend the 10k I got from the car sale where it was originally going: on the house.
On the other hand, having a steady 10k in a savings account, on hand and ready should any more unexpected expenses comes up, sounds pretty damn sweet. This makes me want to sell my dividend fund and keep my emergency fund as is.
Overall, this is a product of me being rather stupid.
I assumed closing costs would be 2-3 grand, not the 11 grand it is turning out to be.
For that reason, I think the best plan of action is going to be to sell my dividend fund and keep my emergency fund intact.
I see no good reason to follow up one stupid decision with an emergency fund draining “solution”.
Dividend investing was for fun, an emergency fund is a necessity.
With this plan of action, I can get what I need for my new place comfortably, still have a fully funded emergency fund, and can evaluate my dividends to see if there are better companies I should purchase.
All in all, it should work out rather well.
I’ll have to bookmark this post as a reminder to be more prepared next time.
What do y’all think? Have you ever been blindsided by an unexpected expense?
Feel free to leave a comment!
That’s all I have for today.
Until next time,
Avast ye scoundrels!
Photo Credit: Stemjobs.com