My Surprise $1,300 Furnace Repair Bill

emergency fund

Save 3 to 6 months’ living expenses – or whatever you can afford – for unexpected home repairs.

Last Friday morning I woke up to a loud noise in the laundry room from my furnace. I didn’t think much of it until I noticed the heat didn’t come on an hour later. The temperature was quickly plummeting in the house. It was supposed to be 21 °C, but it was only 16 °C.

Before calling my HVAC specialist, I attempted my own troubleshooting. I restarted the furnace by flipping off the switch (it looks like a light switch), but the heat wouldn’t come on. I noticed the pilot light was out (in case you’re wondering, I have a forced air furnace). I’m no Mike Holmes, so I went on “the Google” to see what that meant. Apparently on newer furnace models, the pilot light only comes on when the heat comes on.

I knew something was wrong, so I acted quickly, since it was only -1 °C outside. I have tenants and didn’t want them to freeze, especially since they have a newborn child. I phoned my HVAC specialist to see what was the matter (it always helps to have reliable specialists in the trades, such as plumbers and electricians, on speed dial for the times that you need them pronto).

After my HVAC specialist stopped by and assessed the situation, he found that it was a part in the motor that had failed. He estimated that it would cost about $600 for the part, plus labour. Similar to the HGTV TV show, Income Property, I had two options:

Option 1: Pay $600 plus labour to repair my furnace.

Option 2: Pay $3,000 plus labour for a new furnace.

Since my furnace is only eight years old, I decided to go with option 1, repair my furnace. As luck would have it, my furnace is a Carrier gas furnace, which only accepts parts from a registered Carrier dealer. A part that would normally cost $600 on most furnaces ended up costing $900 on mine.

When you have no choice, but to buy parts from the dealer and can’t shop around, it should come as no surprise that the dealer charges you a pretty penny. This taught me a valuable lesson: consider if you’re able to shop around for parts when your furnace needs repairing or if you’re stuck buying parts from the manufacturer at a premium.

When all was said and done, my total furnace repair bill came to about $1,300 (parts and labour included). My HVAC specialist said everything else looked in good shape, but with furnaces, it’s anyone’s guess when they’ll break down next. That being said, if you take good care of your furnace by regularly changing the furnace filters, you can help extend its lifespan.

This is actually the second major repair I’ve had to make to my furnace since I bought my house less than five years ago. When I first moved in, I had to spend $600 out of the blue when my furnace stopped working in my first week I was a homeowner (oh joy!). The next time there’s a major repair, I’ll seriously consider getting a new furnace.

Emergency Funds: Saving Up Ahead of Time

Luckily, I’m mortgage-free, so I had the money sitting in my savings account. Not everyone is so fortunate. When you’re a homeowner, it’s important to plan ahead for the cost of unexpected home repairs and regular maintenance. Even if you live in a condo, major repairs can still come up (my mother’s condo was recently flooded). Major home repairs often come up at the worst time. I have a coworker who has booking a summer trip, only to have her basement flooded the day before she was supposed to leave.

If you don’t want to go into debt, my best advice is save money ahead of time. As I mention in my book, Burn Your Mortgage, keep three to six months’ living expenses in a high-interest savings account. Personally, I like to keep things simple. I make sure I always have $10,000 sitting in my savings account. It gives me peace of mind knowing I won’t be caught off guard by unexpected expenses.

Don’t make the mistake of putting every spare penny toward your down payment and closing costs. Hold back some money for your emergency fund. I know that $10,000 is a lot to save, especially if you’re making the minimum down payment. So try to save $1,000, $2,000 or whatever you can afford. Once you’re settled in your home, work on building your emergency fund.

Sean Cooper is the author of the new book, Burn Your Mortgage: The Simple, Powerful Path to Financial Freedom for Canadians, available at Amazon, Indigo and major bookstores.