What do you get when you combine water, untreated wood, and a two-story porch that may have been poorly designed? You get severe water damage and a $7,500 estimated repair bill. Ouch.
Thankfully, this costly repair will burden my neighbor’s finances and not mine. But up until a couple of days ago, I wasn’t so sure about that. Let me explain.
My neighbor, TJ, has decided to sell his house. So he hired an inspector to unearth any possible defects that might turn off potential home buyers. Smart move. A good seller always tries to anticipate problems before he puts his home on the market. And sure enough, when the inspector began investigating the second-story porch, he saw signs of water pooling around the columns. Not good. If water had managed to intrude at these points, the structural integrity of the porch may be compromised.
In order to confirm the inspector’s fears, TJ and the inspector had to remove a piece of trim from the underside of the porch (see photo below). And much to the dismay of TJ, the inspector’s fears were confirmed. Water had seeped in over the past several years and rotted out all of the joists supporting the porch. The inspector advised TJ not to let anyone step foot on the second-story porch.
The inspector also advised TJ to get a contractor. The first contractor on the scene gave TJ a repair estimate of $7,500. TJ is still waiting for estimates from the second and third contractors he called. Isn’t being a homeowner wonderful?
Now here’s the rub. The two-story porch on my house has the exact same design as TJ’s. And my house is about six months older. What, then, is the likelihood that my second-story columns have held up any better against the elements? In my mind, I calculated the odds as “little to none.”
Okay, drum roll, please. Will Mrs. G and I be out several thousand dollars?
Fortunately, no. The inspector we hired found no evidence of structural decay. There were no pooling stains around our columns. There were no soft spots anywhere on the floor of the second-story porch. And when we removed a section of trim, we discovered that the joists were in pristine condition. All I need to do is hire a handyman to tighten up some of the trim work. Whew! Dodged a bullet.
A few months ago, I put forth the proposition that an emergency fund beyond $5,000 was overkill. And based on our real life experiences, this was a reasonable assumption. After all, we’ve been down in North Carolina for 11 years now, and our most costly emergency to date has set us back $3,800.
But homes are large structures with a lot of complicated parts. A failed front porch or HVAC system could easily devour a $5,000 emergency fund. So let me walk my emergency fund proposition back a bit. If you’re a homeowner, you should have an emergency fund equal to the replacement cost of your home’s most expensive component. For Mrs. Groovy and me, that’s probably our HVAC system. And since I figure our HVAC system would cost around $12,000 to replace, I can now boldly proclaim that an emergency fund beyond $12,000 is overkill.
See what happens when a financial tough guy gets punched in the face by reality?
Side Note: When I wrote that an emergency fund beyond $5,000 was overkill, Mrs. Groovy and I had about four years of living expenses sitting in cash. By all rights, we should have put most of that money into a short-term bond fund. A one-something percentage return is better than a zero-something percentage return. Right? It is, but we did nothing. We just don’t feel comfortable putting any more money into the market right now. Both the stock market and bond market appear very frothy. So, yes, we have a very excessive emergency fund. On the bright side, however, if we did need $7,500 to fix our front porch, we had it at the ready.
Talking Trash with Mr. Groovy
Okay, groovy freedomists, that’s all I got. Let’s end this week with a little fun. And nothing says fun like another episode of Talking Trash with Mr. Groovy.
In this episode, I discuss Tim Ferriss and Penny from She Picks Up Pennies. Now there’s an intriguing couple. Enjoy.
Grease for peace, and happy Father’s Day to all the dads out there. May you be sufficiently exalted by your loving families.
If you’re interested, here are the links to the two YouTube videos I mention in Episode 5 of Talking Trash with Mr. Groovy.