Recover and Maintain 6 Month's Worth of House Payments in Savings

Playing with my money is like playing with my emotions…

Initial estimates projected we would refill 45% of our house payment savings fund by Dec. 31st, based on the promises made by my new boss at my new job. But then he began his hemming and hawing and backtracking. A recalculation led us to believe that even by being very austere and conservative, we could only expect to recover about 20% by year’s end.

You can steal my truck, insult my mother, kick my wife and sleep with my dog. But keep your hands off of my stack, jack.

I start another job on Monday, and my new-new boss and I talked at some length about schedules, wages, commitments, and no-bullshit. Based on the new schedule it looks like we will infuse our savings with 55% of what we need to meet the 6 month goal, and it is likely our income tax return for 2011 will take care of the rest.

With some extra cash coming in we have a plan to recover our house payment savings. We had to dip into the saving several times to tide us over during my extended unemployment, but we didn’t spend it all. It has been depleted further than we thought it would be, however.

The plan is to to make a 75%-25% split of budgeted money between our house payment savings and credit card payoffs. We had been making 3X the monthly minimum on some credit cards until I quit working, then we went back to making the minimum. Now we want to get back on track knocking those payments down.

Don’t know how long it will take to recover our savings cushion, probably not until we get our 2011 tax refund (provided we get one). Just gotta keep working and putting money aside and living on an austere budget until we make reach that goal.

After completing our 2010 tax return tonight, it appears we are in for a whopping refund from both the Feds and the state! Whopping when you consider that we have had to pay taxes every year since we married, no matter how we finagled our W-4s. But having the house last year and paying bookoo interest on the mortgage gave us hefty deductions, and it was Uncle Sam and Govorner Deal’s turn to write us a check. And the state of Georgia still owes us $600 for the new home buyers credit we received last year, which they are paying out in annual installments.

This alone puts us back in the black on our house payment savings account. When the checks get direct deposited we will be sitting on eight months of house payments. We could pay the mortgage out of this account without ever dipping into our main checking until October.

Of course that is not our intention. The money is to be kept there as a safety net for situations exactly like the one we are in now… where we are a single income household. While I look for another job, the savings fund keeps me from having to take whatever comes along out of desperation. But it is not there to take the place of a second income for the next eight months. And we would like to get to a point very soon where we can resume paying the mortgage out of our incomes, keep the six month safety net, and perhaps use the extra amount of cash from the refund for home improvement projects, vacation, other debt reduction, or any one of the millions of holes our money can slip through.

S. hopes we can hold onto enough money to accomplish some specific things later in the year. She is very much relaxed now that we have the extra buffer between us and mortgage default. I told her not to worry. We made more last year than we did the year before, and we are going to keep going on that trend. 2011 will be even more prosperous for us, and in many, many ways.