Big expenses coming up in the next few years

We’ve been out of graduate school for ~10 years now, which means a lot of the stuff we own is now ~10 years old.  We’re now at a point where the probability that something big is going to need to be replaced is pretty high.

Our cars are 10 and 11 years old.

Our 12-year water heaters are 10 years old.

Our roof is getting on about 12 years.

Our refrigerator is something like 15 years old.

Our w/d are 10 years old.

Our dishwasher is 9 years old.

We’re not really sure which of these things is going to break down, or even how many are going to break down.  We shouldn’t need the cost of all of these in our cash emergency fund, but the longer time goes on, the more plausible it is that we’ll need to cover two or more of these in a short time frame.

We’re pretty sure we can cash flow water heaters.  Our cash emergency fund can handle one car, but not two.  Or not one car and a new roof.  Plus I’m kind of hoping that we can do solar with the next roof replacement (we’ll see!) — even if there aren’t government incentives, DH likes new technology and I like the idea of lower a/c bills in the summer (even if we don’t actually save money), which would add considerably to a new roof expense.

I feel like if we have enough in savings to  get us through the unpaid summer should DH permanently lose his job and to handle a major expense like most of a new car, then we should also be ok for the future, even though it might mean having to take on a temporary loan or to sell stocks.  I don’t think we need to have a targeted savings account for each of these major expenses as hopefully we’ll have time to replenish the emergency fund after one comes due, but maybe I’m wrong.

How do you deal with big lumpy unexpected but still kind of expected expenses? Does everything expire around the same time for you or have you spaced things out?


33 Responses to “Big expenses coming up in the next few years”

  1. Zenmoo Says:

    We keep all our money (except for DHs business) in one account as an “offset” against our mortgage loan right now to minimise interest. So when we need to payout an expense we have quite a bit of cash handy. Basically we count on my severe aversion to spending & shopping and a very clear statement of how much we owe vs how much we have to keep spending under control. Having said that, I got over myself when we got to more than 50% of loan value saved and accepted it was time to replace or buy a few things. So in the last few months we have upgraded my 10year old car (cash $40k), renovated a 20year old kitchen, bought new sheets & towels (to replace the ones we got 10years ago as wedding presents) and are gradually buying a few items of furniture /furnishings we’ve lived either without or with very crappy versions of for almost three years (like a coffee table, a tv shelf, hall table, living room curtains) or even longer (pink, white & green stripey roman blind in our bedroom & thin metal venetians you’ve had your day – or rather your 10+years).

    • chacha1 Says:

      we still have the bath towels we acquired when we got married … 15.5 years ago. :-)

      • nicoleandmaggie Says:

        We still have DH’s towels from college! They are light blue and fraying and I fully intended to leave them in Paradise last year but instead they were needed as packing material and thus came back with us. (My college towels were converted to cat carrying case towels back when we were trapping all those cats in our backyard.)

      • chacha1 Says:

        I’m keeping our tatty old ones for the upcoming move. After that, however, they will go to the animal shelter and I will get some new ones. There are a couple of “bath sheet” sized towels that have had very light use and DH may keep those (I don’t like them, too big and heavy) but MY bathroom is getting NEW towels. Harrumph.

        Our shopping list for after the move is … shocking.

      • Leah Says:

        While they are not every day towels for my parents (which might explain some of the longevity), they still have their towels from their marriage approximately 35+ years ago. They use the hand towels and shower curtain in their guest bath.

  2. Leah Says:

    We just have one big “e-fund” that also saves up for big expenses. We try to cashflow as much as we can, so we’ll reign it in and stockpile if we know we have an expense coming up. For example, we are planning a big Hawai’i vacation for our two week spring break next year, so I’ll start tightening up in the fall and letting money pile up in our checking account.

    The e-fund is just general savings and gets “depleted” for big expenses, like us buying a car last year.

    I think we might do something different if we owned a house (or keep a bigger e-fund), but this works for now. I try not to dry out the e-fund, as we are saving for a house, but we can be flexible as needed.

    • nicoleandmaggie Says:

      Will your school do any subsidizing for your living expenses if you buy a house?

      • Leah Says:

        Unfortunately not :-( Hard to say for sure, but we will likely buy a house when we decide to leave our current employer. But we both really enjoy working together and at the same place, so we’ll see what our future ends up being. Hard to predict, but we are happy for now and just working at saving. You also never know when one of us will be asked to leave (unlikely but can happen if leadership changes), so we like to keep a big buffer to deal with that if needed.

  3. chacha1 Says:

    We’re renters in California, so the only “big” household thing we have to have on our replacement radar is the refrigerator. ;-) At the moment. After we move, we’ll be getting our own laundry machines. If all goes well, we will be in the new rental for the rest of our time in L.A. Whatever appliances we acquire will probably *not* accompany us into retirement, so we have to budget for new things then.

    Cars … eh. I was able to pay cash for my used Accord back in 2007, but cash isn’t going to be an option for either of us when the next replacement occurs. My plan for replacing the Insight is “get the airbag recall work done, get the property loan paid off, and then trade the Insight in for a Subaru.” DH does not have a plan for replacing his car; he thinks he can keep it alive indefinitely, or at least long past the point where a sensible person would say It Is Costing More Than It Is Worth.

    • nicoleandmaggie Says:

      I sympathize with your DH. My little Accent is staying with me long past the Costing More than It Is Worth stage.

      • chacha1 Says:

        I actually sympathize with him too, he spends an awful lot of time in his car and has gotten it fixed up to suit him. I just wish we could write off more of the expense … here in L.A. the “miles driven” has no relation to the “time driven.”

    • Rosa Says:

      we got really lucky and just after we hit the point of disagreeing about Costing More Than it is Worth (but before I got around to canceling the comprehensive insurance) our car got smashed and totaled while being still driveable.

  4. Taylor Lee @ Yuppie Millennial Says:

    I put $250/month in a home maintenance savings account separate from my e-fund that I’ll cash out when we need to start repairs/replacements. Appliances we could probably cash flow but HVAC, siding, and roof need to be saved for. Hopefully, since we have replaced everything but the fridge within the past two years, things will stay unbroken for a while.

  5. Cloud Says:

    Our cars are roughly the same age as our kids, and our older kid just turned 10. That car is a Prius and running well, but… let’s just say that even a fairly minor accident would probably total it. I think the younger car will go first, though. It was t-boned at a traffic light back when the kids were still in day care, and it has had more maintenance than we think it should have since then. Basically, our mechanic (who we trust) has said that if it comes up on another major repair that isn’t expected, we should consider just replacing it. Perhaps there is extra stress on some parts (like the cv joints) because the frame isn’t quite right after the repair.

    We just replaced our water heater. The fridge will probably be the next appliance to go: we repaired its (replaced a fan) this year. The roof is new, but we never got the patio cover we wanted or did the other yard upgrades we had planned. We need a new mattress.

    But what we’re actually going to do with our spare cash this month is pay our taxes. Wheeee! We think we can cover the bill, which was quite a bit bigger than we expected, without touching our car fund, but it will probably mean delaying the new mattress for another month, and who knows when we’ll get to the backyard work we wanted to do. Sigh.

    • nicoleandmaggie Says:

      That’s how I know the age of everything too– our oldest is 10 as well. :)

      We repaired our fridge’s fan a couple of years ago– still going strong. It was the cheapest one at Home Depot back in graduate school and it will not die.

      I completely forgot mattresses. Most recently we swapped out our mattress with DC2’s mattress which we gave hir back when it stopped being comfortable for us. Being used by someone under 30 lbs for a few years has allowed it to get back to comfortable levels.

      We got a little bit of $ back with taxes which went directly along with much more money to pay estimated taxes for next year!

  6. J Liedl Says:

    Eldest is starting grad school with a healthy stipend. We’re starting to think “okay, how are we going to reapportion the money that’s been going to tuition, housing and expenses these past four years?” It’s all going into saving so that when we replace the oldest car (ten next year!), we can do it with cash. Then saving for the kitchen remodel and probably a rework of the back deck. Having cash-flowed a whackload of expenses over the past few months (feline dentistry is expensive, yo!), I’m pleased that we can do that, but I’d rather focus on building the savings so that the stress is reduced.

  7. Debbie M Says:

    Don’t these things come in threes?

    I just save a certain amount each month. Sometimes my savings get crazy high for a while when nothing bad happens, but I just keep saving. Then when a bunch of stuff happens all at once, it’s okay.

  8. Revanche @ A Gai Shan Life Says:

    I’m not really sure in the normal scheme of things. We bought our cars at ages 8 and 10, respectively so we started behind the curve on that point.

    Our water heater is nearing the end of its life but we won’t worry about that if we sell this year.

    We’re looking at fixer uppers now and that would be a huge wallop starting now and continuing over … years. I think we’d be replacing water heaters, a roof, lots of house innards, and sundry other things all around the same time.

  9. Rosa Says:

    we’ve owned the house 16 years now, so we’re getting to our 2nd round of replacing things. What we do is, we have a big (too big, I think) savings account that we dump money into. An agreed-upon amount of it is emergency savings, anything over that is non-emergency big savings – car, water heater, dryer, dishwasher, etc. So far we have been lucky with insurance – we were saving up to replace the siding, but we got a giant hail storm, for example. Our car that just got totalled, I would have guessed was worth about $1000 but the insurer said $2500.

    A lot of that large-purchase spending is not 100% urgent. Since we have to buy a car this month, we probably won’t get a dishwasher until fall (boo!). When we replaced the dryer it was fall and we had a kid in cloth diapers, so that was urgent – if it broke now, it would wait til fall.

  10. Rosa Says:

    it seems kind of beside the point to have a lot of separate sub-accounts. Once you’ve been doing it for a while you realize that there’s just always something about to break and, if nothing does, something else you want to spend the money on, if you own a bunch of durable goods and a house. I envy Chacha her renter’s stability – ideally the cost is close to the same over time, assuming your time is as valuable as the landlord’s. But you don’t have to be the one to worry about cash flow.

    • chacha1 Says:

      Well, California does at least require that a landlord provide functional plumbing, lighting, heat, and something to cook with. They are NOT required to provide a refrigerator or air-conditioning. So we’ve bought our own refrigerators. Our building has central air, but it was a 50+ year old system and routinely failed during heat waves, so we bought a portable AC unit. (Some tenants actually stayed in hotels one time with the temps were in the 90s for several days.) Our plumbing is also 50+ years old and routinely fails.

  11. SP Says:

    I have one quite healthy emergency fund, then a smaller home repair fund that I’d like to grow to $30k to be prepared for a roof.

    We have things that are likely to be more spaced out. We put in a new furnace when we moved in. Our fridge, stove, and dishwasher are of similar age and I’d guess they are ~5 years old. Our washer/dryer seems old – but I really have no idea. Our roof is kinda old, but our inspector (and then another roof expert we hired later) said it probably is good until ~2020. The new roof will be $$$. We probably won’t do a roof before T gets tenure unless absolutely necessary. Not sure about the water heater either.

    So basically, the roof is on my radar since it is likely to be the biggest bill, everything else I assume is covered by the e-funds. We try to pick up regular maintenance items as it makes sense.

    • Rosa Says:

      $30k is about what we had in mind for a roof.

      What we found when we had the hailstorm and insurance covered our roof (so we went yay! and got $30k in siding instead…but now we never have to do that again) was that literally nobody we know had ever reroofed on their own dime. We live in the Midwest and apparently if you wait long enough there will be hail or a tornado. My in-laws were APPALLED that we were thinking of just doing it.

      • SP Says:

        Hmm, I think I’m unlikely to get that lucky in Cali – it did hail this “winter” but nothing significant.

        But I’ll let my parents in the midwest know they should be on the lookout for re-roofing storms!

        But – if a roof is $30k in the midwest, I wonder if I need even more?!?! My house is smallish, but labor here is off the charts.

      • Rosa Says:

        our house is very old, very tall, and has a very complicated roof (cross-gabled and the part that’s not gabling is ski-sloped, not a plain flat slope.) I can’t imagine a regular roof costs that much.

      • Kelly Says:

        We live in an expensive coastal town in California, have a very steep and complicated roof (several cross gables, arched sections, etc), have a moderately large house, had a really horrible tear off (it was 30 year old cedar shake) and it cost $30k. And, we had no choice but to go with the most expensive composite option available (HOA guidelines require a triple layer composite) and did all new gutters. That said, we didn’t need many repairs to the roof deck (plywood) which could have driven costs up. Short story is that I think if you save $30k, you’ll be doing well.

  12. Matthew Healy Says:

    I call these sorts of things “expected surprises,” because at this stage of my life I am likely to be hit by at least one of these items in any given year, sometimes more than one, but I cannot predict which or when. Some of these items, like cars or laundry machines, may also present you with a repair versus replace decision (with the water heater, absolutely replace it before the warranty has ended, because I can tell from experience you do not want to be calling a plumber at 2AM with an exploding water heater!). With cars, I prefer to be the second owner and keep it for a long time. With cars, of course, if one has good credit one can get loans at pretty low interest rates just now if cash happens to be tight.

    The Consumer Reports Annual Buying Guide book has some great advice on whether to repair or replace something like a washing machine that is X years old.

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