How to Prevent Major Home Repairs from Breaking Your Budget
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Regular home maintenance is essential for avoiding expensive problems in the future. Unfortunately, no matter how much care you put into your home, something can always go wrong. Be prepared for these unexpected expenses. Here are some smart tips to help you cover the costs of major home repairs.
Build Up Your Emergency Fund
Everyone should have an emergency fund for large, unexpected financial threats. The loss of a job, a serious illness, or a major home repair can really take a toll on your financial health. Most financial experts recommend keeping 3 to 6 months of living expenses in this fund. If you have to dip into this fund for an emergency home repair, work to build it back up again as soon as possible. Alternatively, set up a separate home repair fund—just make sure you put aside enough money that you can avoid throwing charges onto a high-interest credit card. According to HomeAdvisor, home repairs and renovations cost American homeowners an average of $10,533.
Budget for Expected Repairs
Set up a separate budget for repairs you know you’ll need to make in the future. Many house features have limited lifespans, and require repairs or complete replacements on a routine basis. Asphalt roof shingles, aluminum gutters, and wood shutters only last about 20 years. You’ll get about 10 to 15 years out of your fridge, dishwasher, dryer, and washer. When it comes to your HVAC system, expect an expensive upgrade after 15 to 25 years, even with regular maintenance. Find out how much you can expect to pay for these expenses, and include a savings plan in your budget so you can build up the funds to cover them.
Understand What Home Insurance Won’t Cover
Home insurance is a valuable level of economic protection against sudden damage to your home. But despite what many homeowners think, home insurance does not cover everything—damage to your foundation caused by flooding or earthquakes, for example. Also, insurance doesn’t cover wear and tear over time, so your policy won’t help you out with cracks in structural features. For a larger list of problems not covered by homeowners insurance, check out this article from House Method.
If you live in an area where flooding or earthquakes are common, consider adding insurance premiums for these disasters. While they can be pricey for people who live at a lower elevation or along fault lines, they can save you from complete financial ruin if a disaster occurs. Cash Money Life recommends adding this coverage even if you’re not in a high-risk area. Flood and earthquake insurance is inexpensive in places where the threat of damage is on the lower side.
Find a Good Contractor
When it comes time to make a repair to your home, don’t be afraid to pay a little more for quality work. Contractors who charge significantly lower rates than the rest may cut corners, use cheap materials, or employ day laborers instead of skilled professions. Also, avoid tackling the task yourself unless you really know what you’re doing. With either route, homeowners often end up spending more than they initially would have to fix a poorly-done job.
Find an affordable, professional contractor for your home repair project by following these tips from Nationwide. For example, they recommend asking your neighbors for recommendations, interviewing more than one candidate, and checking for licensing and insurance certificates.
Owning a home has several amazing benefits, but dealing with maintenance can be a bit of a pain. Before you buy a home, remember to consider regular maintenance and repairs, and factor this expense into your purchase budget. Being financially prepared for expensive repairs means one less thing to worry about!