We still have years left in our house, cars, and appliances, but we are saving up for their inevitable death.
Our Home and Cars
My husband and I bought our house in 2007, but it was built in 2004. That means that in house years, it’s a brazen young thang. But in appliance years, I am just waiting to see what goes first. We also bought my brand new Chevy Aveo in 2005 and his 2007 Prius in 2008. My Aveo is barely at 55,000 miles since I hate driving and the Prius is already closing in on 60,000 miles. But I figure we both have at least 5 more years with our current vehicles. Then I want my Mazda Miata darn it…
Our Appliances
Our air conditioner and water heater are 7 years old and seem to be doing very well. I don’t know how long they usually last, but I was expecting at least 10 years or so. When they do go, it’ll be interesting to see how much electricity we save on a newer, more efficient models since our entire house is electric only, no gas. For now though, I am perfectly happy with our $100-$150 electricity bills and won’t mess with a good thing.
We bought the rest of our appliances in 2007, so the refrigerator, dishwasher, stove/oven, above-the-stove microwave, and the washer and dryer set are all 4 years old. How long do these things last? I’m expecting quite a while out of everything but the washer and dryer (we are pretty mean to those two). I think dog hair may end up doing in everything earlier than expected anyway.
There are other things to prepare for – the security of your home and family is always a good idea. One way of achieving this is by looking into obtaining one of the many home security camera systems attainable today. For additional details, check out this websites security cameras.
Home and Auto Account
So, in preparation for something dying on us, we have a Home and Auto Maintenance account at ING. Right now it is only receiving $500 a month from us, which is our car payments to ourselves now that both of our vehicles are paid off. I am seriously considering raising this amount so that we can hit $30,000 faster. That would be able to cover a new car (worst case scenario) and any appliances that poop out on us. Right now it is sitting at about $7000.
How do you prepare for the inevitable death of your stuff?
We do the same thing. We have ING sub accounts set up to delegate savings for household repairs and auto savings.
It is an amazing feeling to be able to pull out of a savings account to cover an expenses rather than putting it on a credit card, or trying to make room in a budget.
Automatic savings also take the pressure and stress of deciding where money goes each month. You set up the auto savings plan, and you forget about it until you need the money.
It’s important to revisit your savings and make sure your priorities are right every few months, but other than that, its an awesome and care-free system.
The ideal way would be to create a sinking fund that you start funding as soon as you buy something new. The formula would be ‘Expected Replacement Cost’ divided by ‘Expected Longgevity’. If you buy a fridge for $1,000 and expect it to last 10 years, you’d put $100 per year (or $8.33 per month) into it.
Problem is this works good on paper but it’s pretty difficult in real life. Inflation (or deflation of particular items) can change price. Things might last half or twice as long as expected. Plus, managing that number of sinking fund accounts would drive anyone crazy.
We manage it by having ‘car repairs’, ‘new cars’ and ‘home repair’ funds that kind of cover whatever comes up.
We don’t save up to replace the appliances because really, they aren’t THAT expensive. I mean, if I wanted a viking stove (so awesome!) then I would but to replace what we have isn’t more than a couple of hundreded each. The fridge is the most expensive but if you buy refurbished then you can get those pretty cheap too.
We do what you do with the cars, we paid off the van about a year and a half ago and have been making the car payment to ourselves since then. It should build up a fund to buy a replacement by the time the van dies. We’ve been dipping into it to ge my husband’s teeth fixed but I think we will still be ok.
I have been thinking about the same thing, but I wonder if I would be putting away too much money. In other words, would it be like having multiple emergency funds?? I’m haven’t decided yet. I love targeted savings accounts and I think it is important to plan ahead, but I wonder at what point we over-prepare and have too much money sitting in 1 percent savings accounts.
You may want to add to your savings for possible future remodeling or renovating the house. After 10-20 years, some things are looking shabby or dated.
Only my laptop, but that is just because I want a new Mac…
I hope you knocked on wood every time you said something was working perfectly well…sheesh, way to make things explode!
We have a house maintenance savings account, which needs some attention in the form of increased deposits. New roof next…$9,000.
I really need an appliance replacement fund. REALLY need one.
My washer and dryer belonged to my parents and are almost 20 years old. Even though my mom took excellent care of them, I know it’s just a matter of time before one or both of them quit. And I’m completely unprepared for the day that happens. I have my general emergency fund, but I’d hate to wipe it out for something like that.
Hmm…. Thanks for the motivation! I need to set up something like this!
We have a home maintenance fund that we would take out of if we needed new appliances.
Our house is 20 years old, but we have not had to do any major repairs because previous owners had kept up on the maintenance over time. Our appliances are currently 5 years old since they were 2 when we moved in 3 years ago… except for the dishwasher which is original, and which I love more than the new ones. We had a brand new one in a previous house and they just don’t clean as well as the old ones.
We did replace the roof shingles ($5000 for an extra layer of 30-yr shingles), and the hot water heater ($1000 and went at about 15 yrs).
We recently had an oven part burn out, but it was only $150 to replace vs. $2000 for a comparable oven.
We have about $10K in the home repair fund right now because our HVAC system is original. We are not planning to replace it until it goes, and it is still working great. It was top of the line 20 years ago so I am not too worried as of yet.
I don’t! ha! I am more of a wait and see person. If it dies, I’ll deal with it then. No need to save for what might happen when I don’t know the date that it will happen. But in general I am saving for the basics.
I’ve never thought about this. A maintenance fund is definitely something to add to a savings list. Appliances / machines / vehicles don’t last forever.
Ya, I just have a general fund as well. What I was wondering Crystal, is do you still believe in buying new vehicles after buying two of them? I find this has a variety of opinions on PF forums.
Crystal- with the future success of Budgeting in the Fun Stuff in mind….in 5 years you’ll have a chauffeur driving around your blogmobile. No need for a miata fund.
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