Do You Have the Cash to Cover Common Home Repairs?

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If you’re in the process of buying your first home, you probably already know that you have to save for a down payment, put money aside for furniture, and fund an escrow account. However, there are many other expenses that you may not have considered. One of these is the cost of home repair and maintenance. Popular money blog Generation X Finance explains that “unexpected expenses that can really put a hurt on your budget if they aren’t accounted for.”

 

Before we get into specifics, let’s talk about ways you can protect yourself from overspending. First, maintain your home. This means having your major systems serviced annually, cleaning, painting, and repairing issues on the exterior as they arise, and treating your home and appliances with respect. You also have to be on the lookout for less-than-honest contractors who might dupe you into paying for repairs you don’t really need or, worse, cause damage to your property that they can conveniently fix for the “low price” of X extra dollars. Before bringing any repair professional into your home, do your research. Look online for reviews, and interview at least three service providers for each new home repair or improvement project.

 

How Much Do I Need?

 

No universal dollar amount is guaranteed to cover all of your unexpected home repairs. However, it is generally accepted that you should put aside approximately 2 to 4 percent of your home’s value specifically for this purpose. For example, if your home is valued at $350,000, plan to have at least $7,000 stashed away. And remember, your homeowner’s insurance won’t cover issues related to general wear and tear or negligence.

 

Common Repairs

 

Perhaps one of the most expensive home repairs you’ll encounter is installing a new roof. If you have plain asphalt shingles, you may be able to get away with adding a second layer if the underlying structure is in good shape. Eventually, however, you’ll have to do a complete replacement, and that can cost $10,000 or more. If your roof has missing shingles, damaged flashing, or you can see visible evidence of flooding, such as discolored or water-stained walls, you may need a new roof sooner rather than later.

 

Your HVAC unit is another significant expense that can range from about $3,700 to $15,000 depending on the size of your home and type of system you need. Hyde’s Air Conditioning, a California-based HVAC company founded in 1972, explains that even a well-maintained air conditioner will only last approximately 15 years. If yours is more than 10 years old or doesn’t keep your home comfortable from season to season, it may be time for a replacement.

 

Your electrical panel is, fortunately, something you can expect to last for many decades. However, they are not without faults, and an upgrade may be necessary if the home has been added onto or if you notice signs of faulty wiring, such as discolored power outlets, flickering lights, or a burning smell. A new 200-amp electrical panel costs between $1,300 and $3,000.

 

The plumbing system is another moving part that may require periodic repairs. Leaky faucets, clogged toilets, and busted pipes can cost hundreds of dollars each incident. If you have to replace your hot water heater, you can expect a bill of up to $1,500 depending on the type and size of the unit you need. More extensive repairs, such as replacing your incoming water pipes or outgoing mainline, can cost as much as a small car.

 

Don’t let unexpected expenses turn your dream home into a nightmare. Plan ahead for major repairs, and take your time when choosing a contractor. Your situation may be urgent, but you’ll be in far worse shape if you make a rash decision now.

 

Image via Pixabay

 

Keeping Your Finances in Check: How to Stay on Track

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Photo via Pixabay by Stevepb

Keeping your finances in order can be tricky; whether you’re just starting out in your career or ready to retire, there are always new things to consider and difficult decisions to make. Creating a budget — and learning how to stick to it — is one of the biggest components of staying on the right track, but it’s also important to learn how credit scores work and what you can do to keep yours in good shape. For older adults, it’s a good idea to start thinking as early as possible about how you’ll pay for your post-retirement years and what you can do to prepare for long-term care should you require it down the road.

 

For those who are thinking of making big purchases, such as a car or home, it’s imperative to do an overhaul of your spending and budget to make sure you can truly afford it. Think about the total cost of owning a home or automobile; for instance, you also have to add in the annual cost of insurance, taxes, and maintenance.

 

Keep reading for some wonderful tips on how to keep your finances in check.

 

Set a Budget

 

Setting a budget will help ensure that you can save a little money back each month, and it will help you get into the habit of sticking to a financial plan. Take a look at how much you spend each month versus how much you bring home; often, examining your spending habits will allow you to cut a few things out or swap them for something less expensive, such as trading cable for a streaming service, which will allow you to save without giving up anything.

 

Buy What You Can Afford

 

It’s tempting to open up new lines of credit when you have the option, but when it comes to making big purchases, it’s usually best to save up and pay cash or only charge purchases that you know you can afford to pay off. For those who are looking to buy a home, it’s important that you understand the total cost and to make sure you have enough for a down payment.

 

Check Your Credit Score

 

Your credit score can determine many things, from your ability to buy a car to what type of home loan you’ll be eligible for, so it’s imperative to keep it in good shape and understand how the score is affected. Applying for new credit can ding the score, as well as simply checking it on some credit sites. Get familiar with credit scores and what the average is, and consider signing up with a financial site that will help you monitor it.

 

Remember That the Little Things Add Up

 

Often, it’s the little things that add up when you’re trying to save money. Carpooling to work can help save on gas, but it can also prevent a lot of wear and tear on your car, which can help you save on maintenance — plus, it’s great for the environment. Couponing will take off several dollars at the register when you do your grocery shopping. Taking your lunch to work most days can save quite a bit; eating out can be pricey these days, even if it’s just fast food.

 

Keeping your finances on track can be stressful, but if you start with a solid plan and stick to it as much as possible, you can ensure that your money is right where you left it and keep stress to a minimum. Talk to your family about how they can help when it comes to saving money.