1 in 4 Homeowners Can’t Cover a $1,000 Home Repair. Do This if You’re One of Them

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Many homeowners aren’t equipped to pay for repairs. Read on to see why that’s a problem — and what to do about it. 

When you buy a home, you don’t just take on a monthly mortgage payment; you also bear the expense of added costs like property taxes, homeowners insurance, maintenance, and repairs.

The latter, however, is something many homeowners may not be prepared for. In a recent survey by All Star Home, one in four homeowners said they’re not equipped to cover a $1,000 home repair. And that’s a big problem.

Home repairs can pop up out of nowhere

The problem with home repairs is that they can be very hard to plan for. Maintenance is more predictable. You know you need to seal your wooden deck, pressure-wash your siding, and have your gutters cleaned at certain intervals. And it’s easy enough to price out the cost of those maintenance items and work those figures into your budget.

But it’s hard to predict when you might need to repair your roof, replace your heater, or fix an appliance. That’s why it’s best to assume a home repair might strike tomorrow. And it’s just as important to be prepared for one.

Have an emergency fund at the ready

It’s important to have money set aside for emergency expenses whether you’re a homeowner or not. But if you own a home, it’s especially important to have enough money in savings to cover three full months of living expenses. That way, if you’re forced to shell out $1,000 to fix something in your home, you won’t immediately have to resort to costly credit card debt and lose lots of money to interest charges.

Why three months’ worth of expenses? The reason financial experts recommend that as a minimum emergency fund is that if you were to lose your job, it might take three months (at least) to find a new one. So if you have enough money in the bank to cover three months of non-negotiable bills, a brief period of unemployment wouldn’t necessarily land you in debt.

Also, there’s a good chance that if you have enough money in savings to cover three months of essential bills, you also have enough to cover a more substantial home repair. Recent Ascent research on household expenses found that the typical U.S. household spends $5,577 a month. So if you have $17,000 in the bank, which is about three times that sum, but you wind up facing a $5,000 home repair, you’d have enough cash to cover it outright.

The fact that 25% of homeowners can’t cover a $1,000 home repair is pretty scary — especially since many home repairs have the potential to cost a lot more money than that. If your savings can’t help you get through a $1,000 repair, do your best to boost your cash reserves, with the goal of eventually socking away enough to pay for three full months of essential bills. You’re not going to amass that sum in weeks. But no matter how long it takes to reach that point, it’s worth pushing yourself to get there.

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