Creating A Home Repair Emergency Fund

You may already have enough in savings-just make it more accessible

Any unexpected large home repair is bad enough; but combine that with having no way to pay for repairs or temporary shelter and you have the ultimate home disaster. A home emergency fund can help to save you from financial discomfort or worse. Even if you believe your house is in great shape, you never know when you’ll have to deal with a surprise repair.

Even if you diligently perform recommended preventive maintenance tasks and follow all the rules for making proactive replacements, you may not be able to protect yourself from an unexpected catastrophe. Our poor friends in Texas this year, with no power, frozen pipes and flooding will attest to that. But you can still be prepared by having an emergency repair fund handy. 

What’s a home repair emergency fund? 

A home repair emergency fund is money set aside to pay for unexpected, emergency-type home repairs. These repairs are considered normal but not predictable. I am not talking about natural disasters, wars, riots or alien invasions, but having an emergency fund can help with any of those also. 

An emergency repair fund should consist of money available in a readily liquid form. Not cash, but a checking account with access to funds. You don’t want to have the money in a long-term savings portfolio where you’ll face massive fees if you pull money out early.

Homeowners don’t need to get too creative with an home repair emergency fund. A simple savings or money market account will suffice so long as it is separate from your normal checking account and thus less visible and tempting. The most important thing is the money must be there when you need it. A useful option is to have access to cash through a debit card or a pre-approved line of credit. Credit cards can work as a temporary resource also, but you will be faced with huge fees and interest rates if you don’t pay it completely off when due.

Even if you believe your house is in great shape, you never know when you’ll have to deal with a surprise repair.

How much money should you save in your emergency fund?

Some financial advisors suggest that homeowners create a cash reserve of three to six months of living expenses. Others recommend you have a cash reserve target of about 1% to 3% of your home value. So, if your home is worth $500,000, this suggests setting aside $5,000 to $15,000.

A good way to check if you’ve saved enough is to learn what items are most likely to fail in your home, then allow for the highest possible cost to repair/replace them.  Some examples of the most likely items to fail are: Emergency water heater replacement $2500-$5,000; burst pipe water damage $10,000-$100,000; hot water re-circulator pumps $600-$800; septic systems $5,000-$10,000; gutter replacement $2500-$5,000; downspouts $600-$1200; drainage system failures $4,000-$8,000; sump pump replacement $500-$1,000; dishwasher flooding and replacement $1200-$5,000; spoiled refrigerator/freezer food $400-$800; down tree removal $3,000-$8,000.  Some of these numbers are staggering.

Of course, each situation is different. A new home with all new systems and appliances is less likely to tap into a home repair emergency fund for many years. Fixer-uppers and older homes, of course, will probably require that money sooner. Larger homes should have a larger fund than a smaller home. 

Some financial advisors suggest that homeowners create a cash reserve of three to six months of living expenses. Others recommend you have a cash reserve target of about 1% to 3% of your home value.

General emergency funds

In addition to a home repair emergency fund, it’s also wise to create two general emergency funds: an everyday emergency fund and a disaster fund. Everyday emergencies—such as a worn out dishwasher in your home—can cut into your monthly budget, so having some cash stowed away will allow you to still pay your rent or mortgage. Work toward having about 10% of your annual wage in your everyday emergency savings account tor if you’re self-employed, put aside 20% since the income is likely to be more variable.

The second emergency fund—the disaster fund—is for life’s calamities that interrupt your income. It could be suffering a natural disaster, losing your job, falling ill and/or needing to take time off work, dealing with a death in the family.

The concern is when something catastrophic happens that people could risk losing their home because all suddenly they can’t make their mortgage payment.

Work toward saving 20% of your mortgage balance for the dire emergency fund. If you put aside money automatically from each check and you’ll quickly begin to get closer to your goal. For instance, putting aside $25 every week will get you $1,300 in a year.

“Put aside” means to have a savings account where the money is readily available through checks or a cash card. Use a savings or money market account for your emergency fund. Something that is safe, low risk and easily accessible when needed.

What if you have too small an emergency fund

Let’s say your septic system dies in the middle of summer and you desperately need to replace it, but you don’t have a home repair emergency fund. Where do you turn? Two options are a home equity loan and a home equity line of credit, or HELOC.

Both of these solutions let you tap into the value of your home to cover emergency costs. A major difference is that the home equity loan is a lump sum and you often have a fixed interest rate.  Equity loans take longer to approve and longer to fund and thus may be unacceptable for an emergency situation.

HELOC is a line of credit that you can borrow. These are usually set up in advance and the homeowner can draw on the money quickly and at any time. A HELOC lets you draw money from the account as much as you need up to the available maximum amount. Also, a HELOC usually has an adjustable interest rate. 

In a worst-case situation, without some emergency amount saved, a credit card may have to do.

Six Disaster Preventers Every Home Needs!

Current times have been tough for homeowners. Just when your home needs to serve as sanctuary for you and your family, it seems to be under attack from all directions. Disaster safety and prevention is more important now than ever.

This winter has shown that severe weather can happen anytime, anywhere and affect anyone. In addition, both natural and man-made disasters like fires, floods, power outages and earthquakes lurk around every corner.  

When a disaster strikes and you really need help, it’s too late! Stores are closed, materials are sold-out, contractors are suddenly unavailable, and first responders are overstressed, or defunded. Experience tells us that when a crisis happens, you need to be able to get through it on your own.

I’ve prepared a list of the most important things you need to help you get prepared.

The big six!

Here are the six most high-priority, disaster deterrents you must do right away.

1. Whole-house inspection
2. Regular maintenance and timely repairs
3. Back-up power system
4. Leak sensing main water valve operator
5. Seismic gas shut-off valve
6. Video doorbell

Whole-house safety inspection

Homeowners distracted by the unending demands of daily life don’t have the time (or ability) to keep track of the condition of the home.  Time speeds by and the condition of your home can slowly deteriorate… till it’s too late. A regular whole-house inspection will keep you informed of your home’s condition and bring attention to potential disasters in the making.

Maintenance and repairs

Once you have the inspection, you must act. Make the repairs that are needed and don’t delay. Then commit to regular routine maintenance to help keep repairs at bay and make everything last longer. Check out the HPS Stewardship program.

Back-up power

A standby generator system has become the single most important disaster safety and prevention feature for any home built in the last 50 years. A backup energy system is not just a convenience, it is mandatory for the protection of all modern homes with features like electronic controls, finished basements, sump pumping stations for flood control, sewage ejector systems or uninsulated water lines.

Even small generators can help prevent the house from freezing, keep critical systems like pumps and ejectors working and avoid the flooding and other catastrophic damage. More sophisticated systems consisting of automatic switching, a battery bridge and a properly sized whole-house generator can seamlessly bridge any power outage so you don’t even know it happened.

Leak sensing water shut-off device

These “smart” devices are able to determine when an abnormal water leak has occurred in the home and will automatically shut off the main water supply. These are fairly new (in the last 10 years) but have proven extremely effective at saving millions of dollars in floods from frozen pipes, loose refrigerator water lines or any other plumbing disaster involving failed and flowing water lines in the home.

HPS has installed many of these marvelous devices and have saved untold amounts of damage and distress. They require professional installation near an electrical outlet, a new valve on the main water line and the programming of the unit so that it becomes “aware” of your water use habits.

Seismic gas shut-off safety device

Here is another simple but effective device.  A seismic valve eliminates the need to manually shut off your gas service during an earthquake. The device senses the movement of the earth and shuts off the gas. The gas flow can then be re-established by manually resetting the valve once you have determined it safe to do so.

These devices are installed between the gas meter and you home on the main line and require no power. We have installed dozens of these devices. They are simple, effective and foolproof.

Ring doorbell and video surveillance

Video surveillance of the entry of your home is now as easy as installing a new doorbell. The video camera is activated anytime the doorbell senses movement and records the time and date of each occurrence so you can retrieve and review at any time.  The video is accessible wirelessly on your smart phone or computer. Additional cameras can be installed around the home to get complete coverage.

Do these six things now!

Don’t become a victim. The Big Six are easy to deploy and will help you to avoid or get through even the most difficult scenarios. If you need help with disaster safety and prevention, HPS can provide more information or do all these things for you. Just contact us at www.homepreservation.com.

Ten Reasons Every Home Needs a Back-up Generator

Americans use a lot of electricity. Last year in fact the total was almost four trillion kwh. That is more than 16 times greater than the electricity used in 1950. This is why a back-up generator  is becoming an important option for the modern home. 

Over the last seventy years electricity has moved from being a novel and interesting source of light, to an essential and often life supporting part of modern life. Americans are more reliant now on electricity than ever for their health, heating, cooling, refrigeration and for appliances, computers, electronics, tools, and even cars and public transportation systems.

When the power grid goes away, we are in trouble. This is why every home needs a back-up source of power. 

The ten most important reasons you should have a back-up generator:

1. Life support: breathing machines, C-pap’s, powered wheelchairs, home dialysis and other medical devices need power either directly or through batteries that must be recharged.
2. Water: Homes that rely on wells use electric pumps to extract and distribute water to the home.
3. Food preservation and cooking: Without power the refrigerators and freezers in your home can only keep food from spoiling for a couple of days. If you only have an electric cooktop you will definitely want a generator or some alternative way to cook. Perhaps a propane or gas camp stove would help.
4. Drainage: Sump pumps require electricity to move water out of low-lying areas to prevent flooding. These are especially important during heavy storms when the power is most likely to be disrupted.
5. Sewer systems: Basement sewage ejector pumps, or septic system elevator pumps will stop working in a power outage.
6. Communications: Your power may be out, but your phone may still work if the cell tower is on. Use a generator to keep your phone charged and internet modem working.
7. Hot water: Gas and electric water heaters need power for circulation.
8. Security: Security cameras and alarm systems need power.
9. Heating systems: Most high-efficiency furnaces have electronic exhaust and fan blowers as well as igniters.
10. Spa: During a power failure with below freezing temperatures, an electrically heated outdoor spa will actually stay warm for about three days. After that, it will quickly cool and begin to freeze around the 7th day. A generator can help keep the spa from freezing and bursting pipes.

If you own a home, you need a back-up generator! So get one, and install and use it safely. Your life may depend on it. Here’s how to select the appropriate generator for your needs.

Selecting a Generator For Your Home

Selecting a good generator for your home can be a lifesaver! If you’ve ever experienced a prolonged power outage, especially during extreme weather then you understand how dependent modern life has become on the electrical grid. When the power is gone, many things you took for granted are no longer there. And this usually happens during the harshest weather conditions. Darkness and extreme temperatures can make every minute without power uncomfortable and can actually endanger children and the elderly. Add in shock, spoiled food and lost communication, and an inconvenience can suddenly spiral into a disaster.

You may not be able to prevent the natural disasters that can take down the power grid, but help is available. It’s called an emergency generator. These are proven and practical appliances that produce back-up electricity, making your home livable until your power grid can be restored. The process of selecting and installing a generator can take time so you need to get started now.

If you think you can just go into your local hardware store when your area is already in the grips of a major power outage, you are already in trouble. You may not be able to get to an open hardware store and if you did you would find the generator isle well picked-over by the time you got there

The time to act is now, Don’t Wait Until It’s Too Late! Emergency generators are for disasters, so plan to get one before the next power outage happens. Here’s how:

Determine your needs

Make a list of what appliances you cannot live without during a power outage. Which appliances and devices you’ll want to use is entirely up to you. Your list might include medical devices, refrigerators, certain lights, a source of heat, etc. Most homeowners will certainly prioritize their refrigerator to avoid food spoilage. If you are tough and resilient, you might only need a few hundred more watts to power some lights and chargers for electronics.

If you have a larger budget, there are generator systems that can keep your whole home running without skipping a beat.

See my post on why you need a generator for a good list of items you might need.

Once you have your list completed, you will need to determine your wattage requirements. Electrical loads are measured in watts. Each appliance uses a certain wattage, so as you compile your list of essential appliances, you’ll need to note the wattage of each. Some appliances will list a normal use and surge use wattage. Use the surge numbers to avoid overloading your generator. Owner’s manuals are great sources for this information. If you don’t have the manuals, you can make an estimate, by using the Department of Energy’s appliance energy calculator.

If you want a more accurate count, hire an electrician to conduct load measurements of every appliance on your list. You will certainly want to do this if you are considering a whole-house, back-up generator system. For smaller generators this is unnecessary since we will add in a fudge factor at the end to make sure your needs are fully met. You do not want to run short of power during a disaster.

Generator types:

When selecting a generator, they can be categorized in two basic types, Portable and Stand-by.

Portable generators:

The first and most common type is the portable generator. Portable generators tend to be smaller, lighter and more easily portable so that they can be delivered and operated wherever needed. Since they are portable, they must be manually connected to your electrical system when there is a power outage. You may need to have heavy-duty extension cords ready as portable generators must remain at least twenty feet away from your structure. A special connection or transfer switch may also need to be installed by an electrician in order for you to quickly connect the generator to any built-in appliances during. Portable generators normally run on gasoline or diesel so you will need to safely store enough fresh fuel (and some oil just in case) on hand to get you through the emergency.

Portable inverters:

There is a second choice available in portable generators called inverters. Inverters are much lighter and quieter than portable generators and they use the same fuel sources. Inverters are quite popular as portable power units and are often used for camping or RVing as well as for emergencies. The most powerful inverter generators only produce around 6,000 watts which is much less than the largest portable generators although they can be daisy chained together to satisfy higher wattage if needed. If you like a quieter and more versatile power unit an inverter may be worth the slightly higher cost. I personally have two Honda 2200 units for our RV that I have used several times for emergency.

Stand by:

Standby generators are the big boys. These are large heavy-duty systems that are permanently wired to your electrical panel. During a power outage these units automatically kick in and begin providing electricity. They can be designed large enough to handle an entire structure or just a few important circuits. The key function of the standby system is it is automatic. Therefore, a standby system will need to be professionally designed and installed. In addition, a fuel source must be considered that can be relied upon during the forecasted length of an emergency. Natural gas and propane are the most common fuel sources chosen for standby generators because these fuels have longer shelf lives compared to gasoline or diesel.

Extension cord safety

If you opt to use extension cords, it is important that you read information about proper cord safety. Also read the generator manual carefully to determine the exact length, gauge and plug type you’ll need for each cord. Because your generator must be at least 20 feet from your home, these cords will be very long. Major appliances like refrigerators will require special cables. There are functional and safety considerations to take into account when using extension cords. It’s a good idea to include their costs before making a final purchase decision.

Once you have set up your perfect emergency generator, you should practice using it and make a detailed plan of action for an actual emergency. This way you will know exactly what to do when an emergency arises. Remember, during a disaster you may be in shock or perhaps distracted or otherwise not thinking at your best. A good place to start is by following the advice in your owner’s manual.

Other important considerations

Some other important considerations to make when selecting a generator include the place you will store the equipment, and where to set up the portable generator for operation. Also, how and where to ground the generator, how you’ll protect the generator from the elements and where you can safely store your fuel reserves.

Most importantly, generators will require periodic maintenance. The most sophisticated standby generators make this easy by conducting automatic test runs. These tests perform diagnostics and will even send you text messages when service is required. Portable generator systems require you remember and perform a maintenance schedule. Whatever maintenance is called for, DO IT! There is nothing more useless than an emergency piece of equipment that does not work during the emergency. See safe generator operating rules.

See Part 1 in this series: 10 Reasons Every Home Needs a Back-up Generator