Why Risk It? 6 Ways an Emergency Fund Saved the Day for New Homeowners

Being a homeowner comes with many joys — and costs. Here are six true tales of how an emergency fund saved the day for new homeowners.


Being a homeowner comes with many joys — and costs. And it’s no secret that homeownership is expensive. Even if you were prudent and saved enough for your mortgage, insurance and taxes, you might get blindsided by the unexpected. In fact, a recent study revealed that homeowners in the U.S. can pay up to $9,000 a year in hidden costs and maintenance. That’s one reason why every homeowner needs an emergency fund.

So, just how critical is it to be prepared for unexpected expenses? Just ask the homeowners below. Here are six true tales of how an emergency fund saved the day for new homeowners:

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When Things Break Down — Within 24 Hours of Moving In

When Kristin Novotny and her husband bought their home in Green Bay, Wisconsin, in 2016, pretty much everything plugged into a wall broke within the first 24 hours. The garage door and refrigerator were dead, and the washing machine had mold everywhere and wasn’t draining properly. The total cost to replace everything was $3,000.

“We had about $3,000 saved in an emergency fund at the time, so it basically wiped us out,” said Novotny, a 29-year-old lifestyle blogger at Little Mama Jama.

Their early lesson on the importance of having a rainy day fund for home-related repairs gave them a kick in the pants to keep their emergency fund flush with cash.

“We’ve always been frugal and focused on paying down debt, but that was an extra motivation to stay focused on our financial goals,” Novotny said.

So when it came time to replace other appliances such as the range, over-the-range microwave and dryer, which cost about $1,400, they had enough saved up to do so.

When Renovations Go Over Budget

When Lauren Bowling bought her home in Atlanta in 2013, she had extensive renovations in the works — replumbing, rewiring, installing a new HVAC system and redoing the kitchen and one of the bathrooms. While she had prepared financially for these projects by borrowing $58,000 from an FHA 203k renovation loan, her contractor ended up going over budget. To make her house livable, she had to tap into her emergency fund for an extra $11,500 to complete the renovations.

“If I didn’t have that money saved, I don’t know what I would’ve done — probably gone deeper into debt,” said the 30-year-old, who runs Financial Best Life and is the author of The Millennial Homeowner: A Guide to Successfully Navigating Your First Home Purchase.

For new homeowners, Bowling recommends squirreling away at least $10,000 for unexpected costs.

“Whenever something goes wrong with a house,” she said, “it’s never cheap to fix.”

When You’re Without Running Water

For Jim Wang and his wife, who purchased their home in central Maryland in 2014, everything was working fine until last summer, when the pipe from the well to their house burst.

“Our emergency fund — and friends who let us shower at their place — gave us some time to gather a few quotes rather than panic at not having water and taking the first quote,” said Wang, the 37-year-old founder of Wallet Hacks.

Good thing, too, because the quotes for the repair varied by several thousand dollars. Ultimately, it cost about $6,000, and the couple was grateful to have the funds available. If the Wangs didn’t, they would’ve probably had to resort to liquidating some of their taxable investments. No bueno.

Want to start saving in an emergency fund but not sure where to start? Check out our free guide: How (and How Much) To Save in Your Emergency Fund.

When You Buy Used — and It Goes Awry

When 26-year-old Kayla Sloan closed on her four-bedroom, three-bathroom house in 2012, she had inherited her grandparents’ washer and dryer, which were in great shape. However, she was nudged by her parents to give the machine to her younger brother, who had just finished college. While a washer and dryer aren’t the largest of expenditures, Sloan was strapped for cash at the time, and juggling paying off her student loans and credit card debt. She bought a used machine online for $600, but it never worked quite right. After multiple attempts to fix it herself by watching YouTube videos and buying parts, Sloan threw in the towel and bought another used one from a friend for $100.

“It was a crazy time for me, because my car needed expensive repairs, plus I was in the middle of switching jobs,” Sloan said.

She was able to use money from her emergency fund, which was at $1,000 because she was focused on paying off debt. Every little bit helps.

When You Overspend

When 34-year-old Kristin Wong and her then-fiance bought a home in the Los Angeles suburb of Pasadena, California, in 2016, they got a little spend-happy.

“Even when you’re renting, you want to buy new stuff to go with your new pad,” she said.

The pair ended up indulging on little things here and there that added up, such as new paint, rugs and light fixtures. Within their first week of moving in, they also had to repair a clogged pipe that cost a few hundred dollars. The grand total came out to a little over $1,000.

“I actually saved about $3,000 extra before we even closed on the house,” said Wong, who is a freelance writer and blogs at The Wild Wong.

If the couple had not had that extra cushion, they would’ve probably resorted to withdrawing from their Roth IRA, which Wong doesn’t recommend doing.

“Have at least a few months’ worth of expenses saved,” Wong said, “even if you have to postpone buying to save up for the down payment.”

When You’re Celebrating Your Anniversary — and Get a Call

In 2016, when Lindsay VanSomeren and her husband were celebrating their eighth wedding anniversary, they received a phone call from the property management company tending to their house in Anchorage, Alaska. The septic line coming into their house was cracked and needed to be repaired. To make matters worse, they would need to remove a deck to get to the line. The total estimate for repairs? A cool $2,700.

Unfortunately, this wasn’t the first unexpected repair on the VanSomerens’ home, which they bought in 2009. The year before, they had to completely replace a water tank, which cost $8,000 — and they had to take out a loan. This time around, they were prepared and were able to use money from their emergency fund.

“It’s an amazing feeling, and I can’t describe how good it feels to know that unless stuff totally hits the fan, we’re probably going to be OK,” said the full-time freelance writer, who blogs at Notorious D.E.B.T.

So, do all these stories make you want a boost for your emergency fund? Take brightpeak’s Savings Challenge, which will help you save $500 in one week.