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


Renovations to Make Aging at Home Easier

As you or your loved one ages, your home may need to be adapted to accommodate lifestyle changes, accessibility and independence. Over 41% of individuals plan to stay in their own homes until the age of 81 or older. It is important to make gradual adaptations to your home as you age to allow for maneuverability. When remodeling to age at home, start early and plan ahead. It is cheaper to do small renovations one at a time than an entire home overhaul overnight.

10 Spring Cleaning Tricks For Everyone

Lazy cleaning is all about minimizing the effort. But, minimal effort doesn't have to mean you live like a slob - it just means you need to know some cool tricks tools that will help do the work for you, or at least make it less painful.

5 Home Upgrades For Your Vacation Rental Space

Vacation rentals are experiencing a surge of popularity as websites like VRBO and Airbnb make them more accessible. Guests can find a place that fits their budget, location and accommodation needs. Hosts can easily list their property.

Replacing Your Bathroom Vanity

Replacing your old vanity can make a big aesthetic difference in your bathroom.

Follow These Steps Before Starting Your Kitchen Remodel

If your kitchen is looking a bit dated, consider a remodel to upgrade its efficiency and looks. Here's a quick guide to planning your kitchen update:

It's Time to Clean Your Kitchen Dishwasher

Whether your dishwasher has a funky smell to it or not, a periodic cleaning should be at the top of your to-do list

Getting the Best Estimated Home Improvement Costs Using Bluehammer's Home Improvement Calculator

The following are tips and tricks to help you better estimate the cost of your home improvement project.

How to Let Go of Unwanted Things You've Inherited

Whether you've inherited a large collection of items or a single bulky piece of furniture, it's OK to let it go if you don't need or want it.

Easy Architectural Details You Can Add To Your Home

Newer homes, especially those geared toward first-time buyers, are often devoid of the level of architectural detail you would find in older or more expensive homes. If you're not a fan of the big, boring box look, you can easily add in some detail to up the charm factor. And, many of these projects can be done yourself with minimal skill and money.

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."

See More Articles