article

Building an Emergency Fund to Cover Unexpected Home Repairs

By Phil Karp, Owners.com via Realty Times

bluehammer

With homeownership comes new responsibilities, including repair and maintenance expenses. Sooner or later, you'll encounter a leaky faucet or a blown circuit breaker and quickly learn that keeping your household up and running is no longer as simple as a call to the landlord.

Deciding how much money to spend on fixing or replacing something that's broken is often a judgment call. Either way, you need the cash to cover the expense. Building an emergency fund to assist with unexpected costs can help you promptly take care of home repairs without disrupting your daily routine.

Establish an Estimated Baseline Cost of Annual Home Repairs

Saving for a home purchase requires persistence and dedication - good habits that should continue well past settlement day. The total amount you'll need in an emergency savings fund can vary widely from home to home, as certain home characteristics may cause you to spend more or less than average on annual maintenance and repairs. Make sure to consider the age of the property, as older houses generally require more upkeep. The quality of appliances, fixtures and underlying systems like heating, cooling and plumbing may also affect your projected home repair costs.

It's also important to consider your home's location. Homes in flood-prone areas may be more susceptible to water intrusion, which can be mitigated with flood insurance. Likewise, exposure to temperature extremes, both hot and cold, can have detrimental effects on your home that require additional repair and maintenance expenses.

Budget for Emergencies and Big Fixes

Your emergency fund should be an amount you save over and above the annual maintenance costs of your home. Pay for predictable monthly or quarterly bills like lawn care, utilities, association dues and regularly scheduled cleaning services out of your household spending budget, not your emergency savings. You can determine how much you're spending in ongoing maintenance by tracking payments and recording the bills you pay in a spreadsheet or a personal financial app.

You may need to increase your emergency fund balance as larger items in your home begin to age. Keep track of your appliances and other items that may need to be replaced in the next year or so, and set aside money to pay for new ones. A large expense such as a roof replacement may require an even longer savings period.

Even in new homes, unplanned repairs can arise from a severe weather event, like high winds or hail. As any homeowner knows, an appliance that was previously working just fine may begin to malfunction for no obvious reason. An emergency fund allows you to handle surprises like these and pay for repairs that aren't covered by insurance.

Plan for Future Upgrades

Once you're comfortable with your new home and your ability to handle the related expenses, you can start thinking about additional home improvement projects - ways to improve your space rather than simply keep up the existing features. When you're ready to tackle something new, start small with a minor project such as a bathroom remodel. Eventually, you can save for larger-scale remodels like a kitchen renovation or an addition that will add value to your home and transform your living space.

If you're about to become a new homeowner, expect the unexpected - build an emergency fund for unforeseen repairs. On top of annual maintenance expenses and the cost of your monthly mortgage and escrow, an emergency savings cushion will help you to breathe easier and make the homeownership experience a positive one.

Want to estimate your home improvement costs before talking with a contractor? Claim your home for free with bluehammer to estimate costs, secure your home inventory and learn more about your home.

* THIS REPORT IS AN OPINION THAT MAY BE INACCURATE AND IS PROVIDED SOLELY AS AN INFORMATIONAL TOOL NOT DESIGNED TO PROVIDE DEFINITIVE ANSWERS. ALL ELEMENTS ARE OFFERED "AS IS" AND BLUEBOOK EXPRESSLY DISCLAIM ANY AND ALL WARRANTIES, REPRESENTATIONS, AND GUARANTEES OF ANY NATURE, EXPRESS, IMPLIED OR OTHERWISE, INCLUDING BUT NOT LIMITED TO ANY IMPLIED WARRANTIES OF MERCHANTABLITILY, NONINFRINGEMENT, TITLE, QUIET ENJOYMENT, ACCURACY, OR FITNESS FOR A PARTICULAR PURPOSE. IN NO EVENT SHALL BLUEBOOK (OR THEIR SUPPLIERS) BE LIABLE FOR ANY GENERAL, DIRECT, SPECIAL, INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES OF ANY KIND, OR ANY DAMAGES WHATSOEVER (INCLUDING WITHOUT LIMITATION, THOSE RESULTING FROM USE OF THE PRODUCT, INCLUDING : (1) RELIANCE ON THE MATERIALS PRESENTED, (2) COSTS OF REPLACEMENT GOODS, (3) LOSS OF USE, DATA OR PROFITS, (4) DELAYS OR BUSINESS INTERRUPTIONS, (5) AND ANY THEORY OF LIABILITY, ARISING OUT OF OR IN CONNECTION WITH THE USE OR PERFORMANCE OF INFORMATION) WHETHER OR NOT BLUEBOOK HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

Know what you should pay for your home improvement projects with bluehammer.Claim your home. It's free!

Popular


Home Foundations And Why Material Matters

The typical single-family home can weigh anywhere from 80,000 to 160,000 pounds. Foundations provide a solid base for a home's weight, help to ensure the house stays level and provides a base for construction to take place. Foundations matter, and so does the material that they're made of. Here's a closer look at both, starting with materials and why they matter.

Electric Water Heater Troubleshooting Quickstart Guide

Technology advances are making electric water heaters more popular than ever. The electric water heater market, valued at $6 billion in 2015, will expand at an annual compound growth rate of 7.5 percent to reach $33.22 billion by 2024, Global Market Insights projects. Advances in energy saving, comfort control and display technology are driving demand. As more homes acquire electric water heaters, home owners will increasingly require specialized maintenance for these appliances. Here’s a quickstart guide to assist you when troubleshooting electric water heaters.

8 Ways to Love Your Small Space More

When we run stories on living in homes with petite proportions, you often tell us, "Small? You should see my house!" Because we aim to please, we've rounded up some of the tiniest rooms on Houzz, picking those that pack plenty of ideas and function into a small space. We think that these are indisputably compact. But, more important, do you?

Is Your Furnace Affecting Your Indoor Air Quality?

The push to make our houses as energy-efficient as possible has, in some cases, led to unintended consequences. Because modern houses are less drafty due to tighter-fitting windows, doors and weather stripping, pollutants that were vented in the past are trapped inside. Most of the pollutants are relatively harmless, but some can be dangerous, and they all contribute to what some people call "sick house syndrome."

8 Laundry Rooms That'll Make You Want To Fluff And Fold

Let's face it. Laundry is no fun. In fact, it's often counted among our most hated chores. But since running around in stinky, soiled clothes is not an option for most of us, it's gotta get done.

6 Ways To Create A More Serene Stress-Free Home

Your home is supposed to be your haven, the place where you can relax and wash away the stresses of the day. But, if your house is messy, cluttered, or designed in a way that opposes certain Feng Shui principles, it could actually be adding to your stress. Apply a few tips to make your home the serene spot it should be.

Creative Ways To Keep Your Home Cool Without Running Your Air Conditioning 24-7

Heat wave! Are you feeling it? Are you over it? Are you dreading this month's electric bill that will rival your monthly grocery budget? There are a few tricks that can help you keep cool at home without running your air conditioning all day.

Replacing Your Toilet

The work horse of the bathroom, the toilet is the most used appliance.

8 Great Tricks For Keeping Mosquitos Away

We all know about using bug spray. And citronella candles. But what about other ways to keep those pesky mosquitos away? As if they weren't annoying enough before, the threat of the Zika Virus has made mosquitos even more dangerous. So we've scoured the web for the best tricks for keeping the buggers away.

7 Simple & Smart Basement Repairs to Consider

No space in your home is more accommodating and homey, or conversely scary, than your basement. A nicely finished basement can be the entertainment centerpiece of your entire home, housing your big-screen TV, the most comfortable couches in the place and a warm, inviting atmosphere that wraps each guest in comfort.

See More Articles