big expenses sting

My husband and I had an unfortunate home expense over the summer that we knew was going to be rather expensive.

Our home has two floors, and each has its own Central A/C plus furnace. About five years ago we updated the central A/C and furnace on the first floor. We knew the second floor's units were in need as well, but instead of replacing them at the time, we reasoned that we don't really use the second floor much. My home office is up there, so I simply put an A/C unit in the window and that worked well for several summers.

Two years ago when we were going to have company in summer using the upstairs guest room, we had someone come out and get the A/C unit running. They did, for about $195, but they also let us know that the furnace is basically condemned for safety issues.

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We knew that we would eventually feel comfortable enough to move our now 11-month old son up to his crib on the second floor (success on that, as of a month ago!), so this meant we'd need to have that floor temperature-controlled.

This improvement on our home, along with the others, came with a hefty, hefty price tag. Thousands of dollars leaving my pocket is never something that I'm happy about, even if we've saved for the purchase ahead of time (and we had).

Thousands of dollars leaving my pocket is never something that I'm happy about, even if we've saved for the purchase ahead of time. Click To Tweet

So at the time we were facing this several-thousand-dollar bear, I asked myself the same question I always do: how are we going to take the financial sting out of this purchase?

How We Take the Sting Out of Large Home Improvements

Since we've had so many of these come up in the past, I used a frugal hack that I wanted to share with you today that helped to take the sting out of the purchase price.

To be honest, we've had several unfortunate housing expenses that had to be taken cared of over the years. I won't detail them again for you here, but I will say that each time we've had to do something like repair the foundation, replace a Central A/C unit, replace the water heater, or take care of an emergency plumbing issue, it's stung.

And yes, you could reason that these improvements on our home are adding to:

  1. a) our overall enjoyment of the home (true!)
  2. b) the eventual value when we sell the home (maybe, but who knows, and who knows how long we'll be here?)

Personally, I'd rather take the financial sting out as close to the time of purchase as possible.

So what I've devised is some travel hacking around our big expenses.

Travel Hacking is Our Financial Sting Antidote

If we know that a big home improvement is coming due, then we use our tidy credit scores to open a new credit card with a juicy, bonus offer. “Juicy” for us means it's going to afford us some free airfare.

If we know that a big home improvement is coming due, we use our tidy credit scores to open a new credit card with a juicy, bonus offer. Click To Tweet

After I open the credit card, I then put the cost of the repair/home improvement onto that credit card to satisfy the bonus requirements.

New to credit card bonus requirements? You typically need to spend $X amount of dollars in a certain number of months to reap the huge bonus. So for this last credit card offer we took advantage of, we needed to spend $4,000 in three months.

That's a tall order…except if you're already going to have to spend that (and then some) on home improvement (doh!).

Pairing a Home Improvement with a Trip

Pairing a home improvement project right around the time when you're going to get to travel for a very reduced price?

That takes some of the sting out of it.

In our case, we received $625 in free airfare for using this strategy. And it was airfare we were going to have to spend anyway, as it was for my sister's beach wedding in August (which I would never have missed).

It also happened to be our son's first airplane ride ever! And on top of all of that goodness, we had our son and my sister's baby baptized followed by a nice party to commemorate the occasion.

Lovely memories made, all of them.

A Word of Caution Plus Examples of How We've “Made Do”

I've saved the most important tidbit for last to really drive this point home: this is only a good strategy if you pay off the credit card before the interest rate kicks in.

Paying an annual fee? Yes, that can still be worth the reward (like paying $99 to get $625 in free airfare is fine). However, charging $4,000 on a credit card to satisfy the requirements to get the reward and then not paying it off within the grace period of 30 days or so?

That is not a smart money strategy for you.

You'd be better off saving up for the home improvement first and making do in the meantime.

For us, “making do” over the years has looked like:

:: Using a window A/C unit in my home office and a space heater in the winter so that we could hold off several years on replacing the outdated Central A/C and furnace. Fortunately for us, our guests generally came during neutral temperature months of the year (guest room is on the second floor)!

:: Living with a hole in our ceiling that wasn't hurting anything for about 8 months until we had the cash flow to bring someone in to fix it. FYI: if you have a plumbing emergency, and the plumber cuts a hole into your ceiling…they're generally not going to patch it up. Lesson learned!

:: After figuring out where the leak was in my car (heating core), and being quoted $750 to fix it, asking the car mechanic if there was a frugal alternative. In the end, I paid just $95 two years ago to have them re-tube a heating core bypass. This means I don't have heat in my car. Is this a doable solution for a Northern-gal in Houston, TX? Absolutely. (In this case we had the $700 to fix it, but it was totally not a priority and still isn't. And the $95 fix has given my beater car two more years of life so far).

And one final word of caution: some companies will charge you more for using a credit card, and/or will give you a discount for paying in cash. Ask how much this discount or extra charge will be. If it's as much or more than the credit card reward bonus, then you're better off just paying cash and not opening that new credit card.

Do you think you could make use of this strategy? What kinds of credit card bonus offers would you want to take the sting off?

Thousands of dollars leaving my pocket is never something that I'm happy about, even if we've saved for the purchase ahead of time (and we had). | https://www.frugalconfessions.com/budgets/how-to-take-some-of-the-sting-out-of-really-expensive-but-necessary-purchases.php

2 replies
  1. Bill in Houston
    Bill in Houston says:

    We had a major home repair back in August. The evaporator coil on our air conditioner somehow sprung a leak. We thought, “Great, we’ll have to shell out for a new A/C-furnace unit.” How did we get lucky? Our A/C guy is honest. He told us that our compressor and the rest of the air conditioning unit works, as does your furnace. They’re not the most efficient, but they work.

    He quoted us $1600 for the job of removing the old coil and replacing it. Our unit dates back from 2001, so parts aren’t plentiful. He cut a new opening for the new, larger evaporator, installed it, built a new front panel from sheet metal, screws, and weather stripping. Charged the system (because the freon had leaked out) and only submitted a bill for $1500. I’m beyond thrilled at the savings! I wish I could have used your credit card hack, but he only takes cash or checks.

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