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Not enough people are saving for home repairs

January 20, 2015

There is little debate regarding the importance of saving money. Maybe you make saving a New Year's resolution, or maybe you consider on retaining a percentage of each paycheck. But if you are like many people, you think of saving money as more of a general rule than having a specific focus for saving. But saving for a specific purpose, or several, is more advantageous and will help you in the long run. Specifically, make sure you are setting aside money for home repairs. While you may not plan on updating or repairing your home this year, unexpected events happen, and you must be prepared.

Make sure you have enough savings for emergency home repairs.
According to recent survey by HomeServe USA, a provider of home emergency repair service plans, not enough American adults are saving money for home repairs. In fact, the survey demonstrated only 40 percent of homeowners budget for maintenance expenses, and only 38 percent have money set aside for home repairs. This is a troubling trend since many repairs and updates are not voluntary but necessary due to accidents or disasters. For example, the survey revealed 35 percent of homeowners don't have enough money saved to repair their heating systems if the machines broke this winter.

HomeServe USA conducted the survey between December 19 and 23, 2014 and received responses from 2,022 adults over the age of 18.

“While everyday expenses such as utility bills are top of mind with homeowners, a hidden danger to their budgets can be the cost of unanticipated home repairs, such as a heating system breakdown or water line break,” said Tom Rusin, CEO of HomeServe USA. “The cost of a water line replacement, for example, averages $2,200 nationally and replacing a heating system can cost thousands.”

Unexpected costs

Saving for unexpected incidents that may occur is the way to approach owning a home. While you may think your home insurance may cover all things that go wrong, this is not the case. Depending on your homeowners coverage, there may be a great deal that is covered, but in addition to making sure you understand exactly what is covered, you should be saving to prepare for what isn't protected.

Financial experts recommend homeowners save 1-3 percent of their home values every year to pay for potential emergency repairs, according to Improvement Center. This is obviously depending on the condition and age of your home. You may need to save a bit more, but you might be fine by saving a bit less as well.

Some common issues affiliated with homes are water heaters failing, leaking water, gutters backing up or needing to be replaced and roof problems. All of these incidents can add up and cost you a great deal if not covered or taken care of properly.

There is no reason to wait until an emergency before taking action to protect your home and your investment. Be prepared by being fully covered with home insurance, and make sure you have saved enough money to address whatever problems may come your way.