This Was My Biggest Financial Mistake in 2021

We all make mistakes. Here's one I regret.

When my husband and I bought a new construction home about 12 years ago, we paid more money than we would've had we purchased a home in our neighborhood that had already been lived in. We also took on a higher mortgage by virtue of buying a newly built home.

In spite of that, we felt we'd made a decent choice. In exchange for a higher down payment and mortgage, we figured we'd be largely off the hook on the home repair front for many years. Sure, we figured smaller issues would pop up that we'd need to deal with, but we assumed we wouldn't have to tackle anything major for quite some time.

Because we were in that mindset, for years, we've budgeted very little for home repairs. But that's a mistake that came back to bite us this year.

A host of expensive repairs

During the summer, our air conditioning system stopped working without any warning. And because of its age, it made more financial sense to replace the unit rather than fix it. But that repair cost us about $7,000, especially since we had to rush to get it done (it was August, and we were dealing with a heat wave) and didn't have a lot of time to shop around for quotes.

Meanwhile, since replacing our air conditioner, we've had to sink hundreds of dollars into a heating system repair and pay a roofer several hundred dollars to deal with damage from a November storm. All told, in the past three months, we've laid out over $8,000 in home repairs. And the bulk of that wasn't budgeted for.

My husband and I have a line item in our budget for maintenance. And we tend to err on the side of allocating extra for maintenance in case small repairs arise.

But because we got so used to not having major home repairs, we neglected to tweak our budget to account for them as our house has started to age. When that $7,000 air conditioner replacement came knocking, we really only had about $200 budgeted for it.

Now thankfully, my husband and I maintain a healthy emergency fund, so we were able to dip into our savings account to cover our costs. But since August, I've been putting in extra hours on top of my already full-time work schedule in an attempt to replenish the chunk of savings we had to remove. Had we budgeted better for home repairs all along, the dent wouldn't have been as large.

Lesson learned

Not budgeting for major home repairs was a reasonable thing to do for the first few years of owning our home. But at this point, our new construction property is no longer new -- it's 12 years old. We have to assume the days of minimal repairs are over.

Recently, my husband and I sat down to rework our 2022 budget, and one major change we made was allocating more money to home repairs. Granted, we might still have to dip into our emergency savings if those bills come in higher than expected. But at least now, we're actively taking steps to set money aside for repair bills on a monthly basis.