Looking at the average gap between losing a job and finding a new one, average costs for extended hospital stays, and even more grim statistics about not being able to find work or losing a spouse are real-world preparations for how many months living expenses you should have on hand just in case. Having children adds monthly expenses you might not have considered when looking for a home, and going from a two-income to single-income household is another. Even if all is well with your family and income, unexpected weather damage or home maintenance will require, well, immediate cash.
None of this sounds particularly fun and savings is less than exciting or easy after you move. Knowing how much to save isn't really a matter of plugging in numbers and hitting a magic balance to achieve, it's more about having enough so that you actually enjoy owning a home and can sleep at night through financial and potential life crises. Some may want a full year of living expenses saved up for emergencies, and others are completely at ease with three month's worth. Many young families start off knowing their family and friends are there if they are ever in need, while others may have little or no outside help.
Starting with a budget, questioning everyone you know about what cash they've had to come up with on the fly, and reviewing expert after expert source for tips and readiness will build stores of knowledge for growing savings and home buying confidence, which most buyers will need a lot of even in a housing boom, not to mention a housing bust.
More information to add to your homing instincts follows on the next page.