We are living the dream in the home that we saved up to build for our family. But then, wear and tear can happen sooner than we expect. Are you financially prepared for a major repair like replacing your HVAC system, getting a new roof, or dealing with molds? If not, you need to create some sort of emergency fund to help cover the expense. There are many ways to set up a contingency plan and be prepared for any type of unexpected major house repairs. Here are some of them so that the family budget is not affected.
Building Funds for Major House Repairs
When you are suddenly faced with broken fixtures around the house, needing basement waterproofing, or looking for foundation repair in Cedar Rapids, Iowa, are you ready to deal with them?
If not, then now is the time to start. You may have bonuses or 13th-month pay this December. Set aside some of that money to start your home repairs fund.
Below are some other ideas.
Setting Aside Money Every Payday
In our present times, it takes most of your paycheck to make ends meet. Most of the time, it takes a two-income household in order to maintain a decent lifestyle for the family.
Despite that, there are a few ways you can set aside some money each payday to save for major house repairs. It may involve trimming unnecessary expenses, but having a little cash tucked back is always a good thing.
For example, pack lunch to work three or four times a week instead of just buying from fast food. You may also cook more evening meals at home and eat out less often. Moreover, freeze leftovers and use them to make new dishes like soups or casseroles when you can.
You’ll be surprised at how these simple things can free up funds that you can set aside for any financial emergency.
Look Into Small Loans
But in case you are cash-strapped but need major house repairs, it won’t hurt to check out local lenders that offer short-term loans.
Even if you don’t have the best credit score, there are lenders that can provide quick installment loans. These can be approved in less than one business day.
Research about them in advance and ask if they have any type of pre-qualification process. Doing so ensures that if you need quick cash to repair something, you will have it in hand by the time the work is done.
Keeping a Credit Card or Two
Using no more or no less than 20-30% of your available credit can be good for your FICO score. It also means that you can draw on that additional limit if sudden major home repair arises.
To make sure the card is ready for emergencies, tuck it away in a safe place at home. This lowers the temptation to use it for non-essentials and allows you to retrieve it when a real need arises.
Selling or Pawning Valuables
Keep a list of things around the house that you can pawn or sell if necessary.
Ideally, these should be things that you can do without until they can be retrieved from the pawnshop. Home electronics, jewelry, and firearms are a few examples of valuables that can fetch enough cash to cover a sudden need.
Paying Off What You Have Borrowed
If you have chosen to make a loan, the next question would be raising the funds to pay it back completely.
So, have you calculated how much stress would a loan put on the household budget?
If it is hard to pay back a loan, find ways to generate additional revenue. A part-time job or some sideline business is one possibility. You can also think about finding ways to make money online. The latter is great if your full-time job requires you to work regular hours each week.
If income from these side hustles is no longer needed to pay off a loan or retrieve a pawned items, keep setting aside the money you earned. You may put it in interest-bearing investment vehicles. That will help you be prepared the next time an emergency arises.
Even if you don’t earn a lot of money, there are ways to be financially prepared for major house repairs.
Try one or more of these approaches starting this month. Doing so will help you build up reserves. Plus you get to know where to turn if you need more money and have a plan in place for paying off debt.