Having A Home Warranty Can Be Worse Than Calling the IRS (Lightning Round)

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.

 


Read more about building a strong foundation here.


 


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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