- Danielle Desir bought a home in her 20s and ‘house hacked’ to pay her mortgage and meet her other financial goals.
- She soon noticed her home was eating up her savings with one-off emergency expenses.
- Now, she keeps at least $1,000 in a house emergency fund earmarked for these expenses specifically.
- Read more stories from Personal Finance Insider.
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 turning 30.
Desir comes from a household of women who valued personal finance. “My mom is an accountant. My grandmother, she’s a master saver of the bunch,” she tells Insider. Her family de ella thought it was important for Desir to get a financial head start, so they supported her in opening her first retirement account at 15 and investing in her first mutual fund de ella at 17.
To save money after college, Desir moved back in with her family. She was grateful for their support from her, but was anxious to buy her first home from her. Once she saved up enough money for the down payment, Desir closed on a four-bedroom home in Connecticut.
Desir tells Insider that she “house-hacked,” getting a few roommates to rent out the rooms so that she can make monthly mortgage payments while still achieving her goals of traveling and paying down her student loans.
‘House-hacking’ allowed her to build an emergency fund for her house
Like other first-time homeowners, Desir was surprised by the random expenses eating away at her savings. She had to replace the fuel tank in her older home for $3,000. At one point, there were massive wasp nests in her backyard de ella, and Desir had to pay hundreds to get rid of them.
“A lot of things went wrong when I first moved in,” Desir says. “I had repairs to do. It was just the anticipation of new bills that I didn’t even know were going to come up.” 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 worth of living expenses kept in an easily accessible high-yield savings account to be used for emergencies. In the same vein, a house emergency fund is a savings account specifically for house-related emergencies.
Desir keeps at least $1,000 in a house emergency fund
Besides things like the fuel tank that absolutely needed to be repaired, Desir also had ambitious plans of remodeling and upgrading parts of her home. She had to be careful not to pull from her house emergency fund to get these remodeling efforts done, even though it was tempting.
The house emergency fund is purely for emergencies and things that need to happen in order to keep the home livable. For example, buying a new faucet on a whim for aesthetics doesn’t constitute an emergency, but hiring a plumber to fix a leaky faucet that can cause greater damage to the house down the line can come out of the house emergency fund.
Desir says, “I started off my house emergency fund with $1,000 so that if something happens, I have something to pull from.” Now that she’s had a few years to fine-tune her system, she’s bumped it up a notch: Her house emergency fund de ella stays at $5,000.