Plan on the Unexpected!
Financial planners always say to save money for the unexpected. I think we should just admit that the unexpected expenses will always happen—that's just life! We may not be able to predict just what the unexpected expenses will be...but something will need to be repaired or replaced. Whether it's a flat tire, an appliance that breaks, or something else, unexpected expenses happen to everyone.
How can you plan for "unexpected" expenses? You need to build up a savings fund in either a savings account or money market account from which you can withdraw money easily. If you need help finding money to save, visit University of Illinois Extension's Plan Well, Retire Well website at www.retirewell.illinois.edu. Saving tips and strategies at this website can help you get started.
Lately I have been having "unexpected" home repairs that need to be done. How much should you save for home repairs? A good rule of thumb is to save 1 to 2 percent of the purchase price of the home for annual maintenance and repairs. If your home or the appliances are older, you may need to save an even bigger amount.
Plan ahead for major purchases and estimate when you might have to purchase something new. According to industry officials, the average life span for the following appliances is estimated at:
- Roof: 20 – 25 years
- Heating system: 25 years
- Refrigerator: 20 years
- Freezer: 20 years
- Clothes dryer: 18 years
- Range/oven: 18 years
- Room air conditioner: 15 years
- Clothes washer: 13 years
- Water heater: 13 years
- Central air conditioner: 12 years
- Dishwasher: 12 years
Do you have a savings fund for those unexpected expenses that we can all expect? If not, now is the time to start building it up!
Source: Kathy Sweedler, Consumer and Family Economics Educator, University of Illinois Extension