How to Save for Emergency Home Repairs

Published by Jeff Stein at March 22, 2018

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repairs

There are many benefits to owning a home rather than renting one, and it’s no surprise that this is an aspiration for a large percentage of Americans.

Currently, the average mortgage repayment is a lot cheaper than the average rental payment, meaning that homeowners may have a little extra expendable income compared to tenants.

However, one expense that homeowners will have to come up with the cash for once they agree a mortgage is the cost of repairing essential utilities in their home, such as the boiler or air conditioning systems.

A common tactic for homeowners is to adopt a ‘that’ll never happen to me’ attitude and not prepare for the possibility of these items breaking down.

When this does inevitably happen, they end up paying for repairs with credit – and it costs them a lot more than it would do if they had the cash available.

No wonder so many Americans are in debt…

An alternative strategy

Here’s a better idea. Why not put away the money you saved by switching from rent to a mortgage. Save this money in a ‘rainy day’ fund, so that any home repairs that crop up won’t financially cripple you.

You could even set up an automatic transfer for this money to go into a separate account on the same day that your mortgage payment is scheduled to leave your account. That way you won’t even miss the money. Yet, as if by magic, it’ll be there in your ‘rainy day’ account exactly when you need it.

If you don’t use it, the money could be spent on an extra holiday or a new car instead.