Sharon asks "My husband and I just purchased a home and are considering purchasing a home warranty, what are your thoughts?"
Please note: this answer is coming from A LOT of personal experience as well as general advice.
Theoretically, a home warranty makes sense. Let's say it costs $50 per month and if something breaks your home warranty company will come out to fix it for you.
Here are the Problems with home warranties:
- It's going to be a terrible experience to call them and talk to a human. (Get comfortable and prepare to enjoy your hold music.)
- They often try to suggest fixing a broken product rather than replacing it, even when replacing it could be the better decision.
- Your money could be going to a much-needed Emergency Fund that would prepare you for everything you paying into for your home warranty!
The Alternative solution: Build A Solid Future With Your "Foundation First"
If you haven't laid a proper foundation, I can understand being tempted by a home warranty policy. I always recommend building your "Foundation First" by doing these three things:
- Creating An Emergency Fund.
- Making A Full Year's Contribution to a ROTH IRA.
- Invest. This Can Be In Your 401K or Other Tools.
Hope you are able to hear my passionate stance on home warranties, and make the best decision for you and your husband!
Thanks for sending your question to our team, Sharon!
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