Owning a home offers a sense of liberation for those who may have spent many years living in an apartment or living with mom and dad. However, while owning a home gives you total control over how you use it, it also means you are 100 percent responsible for its upkeep. How much should you set aside for emergency expenses?
You Don’t Need to Cover the Total Cost of Repairs
While it’s nice to have $10,000 to cover the cost of roof repairs or a few thousand laying around for a new HVAC system, that isn’t always realistic. As a general rule, you can cover half of a major repair by saving $100 or so a month as a major emergency may not occur for years after you buy your home. Assuming that this is true, you could have thousands saved up without ruining your short-term finances just by putting in $25 or so each pay period.
Save Whatever You Can
If you are in a tough financial situation already, the goal is to save as much as you possibly can each month. Saving even $10 a week means that you have $520 at the end of a year. Even that is enough to pay for a new water heater or for the cost of repairing a gas line.
Maintenance Can Save a Lot in the Long Run
While you can’t predict or prevent an emergency from happening, good maintenance can help you reduce the severity of an emergency situation. For instance, having your roof inspected each year could help spot small issues such as water damage or defective shingles before they become major issues. Therefore, investing money in service and maintenance plans like those offered at Chinook Roofing could be the better investment.
How Much Does Insurance Cover?
If you have homeowners or supplemental insurance, your policies should help cover some or all of the cost of repairing any damage your home suffers. Assuming you have adequate coverage, you may be best served saving enough to pay your deductible, which could be anywhere from $500 to $2,000 on average.
How much should you save for an emergency? The answer to that question depends on your financial situation and your desire to go into debt. Whether you save $100 a month, $10 a week or just aim to cover your deductible should anything happen, the goal is to have as much as possible in reserve to cover that cost without crushing your budget.