Comments on: Overcoming Bumps in the Road

By: David

David — Mon, 05 Apr 2010 00:43:53 +0000

My wife and I live in a large city. I’m currently employed with the federal government and my wife is a student.

We rent an apartment and don’t own a car.

Beyond my getting fired, either of us getting sick, or getting robbed can anyone think of a bump in the road that we should be preparing for? I’ve spent some serious time thinking about it, and just haven’t been able to come up with anything else.

By: Shevy

Shevy — Sun, 04 Apr 2010 05:33:57 +0000

Maybe it varies, depending on where you live, but I’ve been in Kristen’s situation (twice!) and neither time did I have a choice in the restoration company or contracters that were used. The insurance company made that decision.

I did like the 2nd restoration company better though, and did make a couple of changes in the kitchen cabinets and their layout, and had them use subway tile instead of the cheapest possible 4″ squares. All in all, I think I paid about $600 out of pocket for the changes (including the electrician who moved the plug for the microwave and buying a combination microwave/range hood, plus a custom cabinet about 9″ wide where they were just going to put a blank piece of wood).

By: Clayton

Clayton — Sat, 03 Apr 2010 00:38:49 +0000

I love the escrow idea. It puts into words what I’ve been doing for a while. I take a very educated guess on yearly costs. Car upkeep, vacation, taxes, etc… Things that are a large chunk of money at one time.

I add it up and have it drafted into a money market account every month and then when I go to fix my car, I just empty the money I need and it’s quick, easy, and painless because I planned ahead.

By: kristine

kristine — Fri, 02 Apr 2010 18:56:19 +0000

wow Peggy, what a great suggestion! I am not a homeowner yet, but I will definitely do this.

By: Peggy

Peggy — Fri, 02 Apr 2010 15:01:32 +0000

Many (definitely not all, as Kristen’s story attests) of the things that we commonly think of as emergencies can be anticipated.

Some online research can tell you when your appliances, roof, etc., can be expected to wear out. Ideally, we’d then divide the estimated replacement cost by the number of months left in each thing’s useful life and start setting that much aside in an “escrow” or “replacement” fund.

Ideally. I’m not doing it, either. Yet.

By: Kristen

Kristen — Fri, 02 Apr 2010 14:35:26 +0000

My husband and I can attest to the value of planning like this, mostly because we DIDN’T do it. A pipe burst in our house, and the entire thing flooded (a 3 story townhouse). We had to gut nearly every room and rebuild. Our homeowner’s policy paid for the repairs, and gave us a tremendous amount of support through the whole process of cleanup, but I wish we had planned ahead a bit more.

We ended up spending about $12,000 on our credit cards to do some “upgrades” at the same time we were doing the repairs (if you’re taking down the 20-year-old builder-grade kitchen cabinets to replace the wall behind them, it’s too tempting not to replace the kitchen cabinets and countertops).

But we made some bad decisions along the way. Looking back, I think we should have taken a few days to weigh our options before we hired a contractor to do the job. We decided to accept the recommended company from our insurance company through a program that allowed our insurance company to pay them directly for the work. We ended up with less craftmanship and care in the work than I believe we would have gotten from a contractor who knew they were being paid BY US.

Trent’s advice is good, not just from a financial standpoint (I still believe the $12,000 in upgrades was worth it), but we would have benefited from having an “emergency plan” ahead of time, one that at least reminded us to sleep on it for 2-3 nights before we committed to anything. Hiring our own contractor with an interior design person on staff would have greatly improved the bang for our buck, so to speak.