An expression in gambling is that “the house wins” when a bettor loses a bet. While my fiance and I do not gamble at casinos, or playing cards, slots, or betting on horses, sporting events, on-line, etc., we do have regular bets with two guys who ultimately always win. And their winnings go to our house.
This all started rather innocently when my fiance and I were watching TV and wagered a friendly bet with each other on how many MRI’s would be shown on a medical drama, sponsored by G.E., a manufacturer of MRI equipment. If I won, my fiance owed a dollar. If he won, I owed a dollar. We have two little stuffed animal bears “hold” the money for us and are receivers of the “winnings”.
As the years went on, we continued to have friendly wagers over silly things we saw on TV. Like how many times “the boss” would slap Tony upside the head on NCIS; how many times some younger guy would say “dude” or (the useless adjective) “awesome” on a popular program; or exceptionally creative cause marketing, such as when you would see a poster for a non-profit organization hung in a fake hospital’s hallway.
We’ve been doing this for about ten years now. Each night, the bear or his twin would receive a dollar or two, or sometimes even more (though we have an absolute limit per night of no more than $10). Periodically, one of the bears would dutifully fill out a bank deposit, and go with me to the bank to deposit his cash in a savings account. (Often, the teller would call the little bear “cute.” He would blush.)
In ten years, we invested thousands of dollars in that savings account. What’s it for?
===> the house.
This is our “house fund.” We have used it to replace the air conditioning compressor when it failed; replace our refrigerator when we had to get a new one; replace not one but two hot water heaters that crapped out; bought new tile that I installed in our kitchen; and had major tree work/maintenance done in our back yard forest by an arborist and tree company. We have many other examples of expensive repairs or replacements that we have had to do over time.
We know that the major equipment and appliances in our home will not last forever, nor the exterior paint job, the roof, or the plumbing. We love our forest, but to maintain its health, we have to have the trees trimmed from time to time by professionals with the right skills and equipment. Rather than be in a situation where we were faced with an expensive prospect for a major home repair or replacement and scramble looking for money — or worse, robbing ourselves by “borrowing” from retirement savings — instead we opened a savings account specifically for that purpose, and found a creative and fun way to invest in it without hurting our wallets too much.
There are more formal methods to create a “house account,” such as an automatic deposit of an amount on payday. That works just fine, and I encourage it. We just think this method is a little more fun, and achieves the same purpose.
While we work hard to keep our house in good shape, working ahead of the curve to do maintenance to head off future more costly repairs, we know there will be times when we will get socked with a huge bill for necessary work. Replacing a $6,000 air conditioning compressor wasn’t in our 2010 plans, but had to be done. Thankfully, while I shopped around and negotiated for a good price, I didn’t have to worry about being able to pay the final bill when due. No carrying payments extended on credit cards at exorbitant interest rates; no home equity loan; no borrowing from retirement.
I blog on occasion about the importance of being financially secure. This is one way we do it. I hope it inspires ideas for your household.
Life is short: plan ahead for major expenses.