September
10 - 2008

Planning for home expenses

The worst aspect of homeownership is the continual parade of unexpected expenses — a headache made more specific in this article about planning for expenses that will arise when you buy a home.

Looking at homeownership as this article does makes it plain that the “unexpected” expenses really aren’t unexpected — just unplanned and significant.

I disagree with some of their time frames:

WHAT WILL IT COST TO REPLACE?

Life Expectancy
(Years)
Replacement
Cost*
Set-aside
Monthly
Roof 10 $2,524 $21.00
HVAC 13 $5,461 $35.00
Refrigerator 6 $820 $11.39
Oven 6 $984 $13.66
Washer 8 $591 $6.16
Dryer 8 $535 $5.57
Exterior paint job 6 $4,100 $56.94
Windows 15 $15,002 $83.34
Doors 15 $6,876 $38.20
Driveway 9 $4,802 $44.46
Heater 8 $1,013 $10.56
* Current cost plus 1.5% annual inflation over life expectancy.
Source: Askthebuilder.com.

Perhaps we were just fortunate, but at our previous home the furnace was 27 years old and going strong. I believe our current furnace is somewhere in the 15-20-year range and operating almost flawlessly (we’ve had one minor, easily fixable problem in three winters of use). So eight years before replacement seems a little high. I’m not so sure about a new refrigerator every six years, either.

But the monthly set-aside is a great concept. If nothing else, it is probably wise to add to your emergency fund by a middling amount, so that you have some kind of cushion if a major cost arises.

Next year, we’re looking at replacing a driveway and possibly revamping our back yard landscaping. But I’m not yet sure what it will cost – or how we’ll pay for it.

In the past, we’ve typically done a combination of saving for and sucking up big home costs. We took a home equity line at our old house to replace the windows, which paid for itself when we sold the house (the windows were a good selling point and increased our insulation and therefore comfort, too).

Now, odds are good that it’s time for us to create a real savings strategy to pay for home expenses — along the lines of the Christmas, tuition and camp monthly savings accounts I started in January.

How do you handle home expenses?

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