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How To Save For Emergency Repairs

06.17.2011 by Mike Young //

I have an old house (built in the 1920s). I also don’t have brand new appliances and house systems (furnace, plumbing, etc). This means that it is relatively often that something in my house breaks down. Does that ever happen to you? From a financial standpoint, the question then becomes what do we do? How do we afford to fix it? Here are 3 options:

1. Have an emergency fund.

This is my personal favorite. I recommend having an emergency fund of 3-6 months worth of expenses. That way, if a major appliance goes down, then you have the money to pay for it. I realize that an emergency fund of $10,000-$15,000 is not something you end up with overnight. It may take awhile, but if you set it as a goal and put all of your focus and attention on it, it can happen quicker than you think. My wife, Mandy and I had some major furnace repairs right in the middle of winter this past year. Luckily, our emergency fund was used to cover the expenses. It provides a huge level of peace to know that your are not one emergency away from a financial disaster.

2. Wait and save!

This is where a little creativity mixed with some grit comes in. I’ll use an example from Mandy and I’s life to explain what I mean. A couple of years ago, we were saving all of our money towards our health savings account because we had our second child on the way. It was a huge expense coming and there was no escaping it. Right in the middle of that frenzied savings, our dishwasher broke. We literally didn’t have an extra dollar to spare as we were putting away every single one to pay the hospital bill. Instead of paying to have it fixed, we actually did dishes by hand (oh, the humanity!). We did it that way for about two months until we had the money to cover the medical expenses. Sometimes, that is what it takes. Let’s be honest, most people would not sacrifice for a short two months in order to avoid going into debt. Once you make a commitment to avoid debt, however, it makes it the only option.

3. Pay for it with credit.

Unfortunately, this is the option most people choose. The culture has driven into us that fixing or buying a new one when something breaks is just what you do. It doesn’t matter if you have the money or not. In fact, that is exactly what credit is for. The fact is that is how most people end up with $40,000 or more in credit card debt. It starts with an “emergency” you just had to fix. Then another and then another. I have yet to meet anyone whose plan was to get into massive amounts of debt. But the mentality that certain things have to be fixed or replaced immediately, causes us to do stupid things. I know it’s hard, but I highly recommend avoiding this option.

Ultimately, it’s up to you which of the above options you choose. I can just speak from personal experience in my own life and with working with my clients that any option that avoids debt is the best one. If you don’t have an emergency fund, then start one. If something happens before you have one in place, then think of creative ways to work around the problem. It will be well worth it in the end.

Categories // Expenses, Money Management Tags // emergency, home, repairs

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Disclaimer

Content on Debt Free Adventure is for entertainment purposes only. Rates & offers from advertisers shown on this website may change without notice: please visit referenced sites for current information. Per FTC guidelines, this website may be compensated by companies mentioned through advertising, affiliate programs or otherwise. We respect your privacy. Privacy policy.

Popular Posts

  • Lending Club - My Review of Social Lending
  • Understanding & Improving your Cash Flow
  • Credit Card Debt Reduction Handbook
  • Our Monthly Debt Reduction and Savings Statements
  • Pay off Credit Cards VS Build Emergency Fund Savings - Me VS Suze Orman
  • Credit Cards - Close 'em Shred 'em & Forget 'em!
  • More Reasons to Pay Off Credit Card Debt
  • Wise Use of Paid off Credit Cards? You Decide.
  • The Whole Armor of Personal Finance
  • One World Currency - New World Order
  • Debt Testimonials - Encouraging Success Stories!

Disclaimer

Content on Debt Free Adventure is for entertainment purposes only. Rates & offers from advertisers shown on this website may change without notice: please visit referenced sites for current information. Per FTC guidelines, this website may be compensated by companies mentioned through advertising, affiliate programs or otherwise. We respect your privacy. Privacy policy.

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