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FINANCIAL EMERGENCIES have a way of compounding when least expected. This is often coined as a correlated risk. I call it running out of clean underwear.
My father used to profess, in emergencies, that turning pairs inside out was a legitimate way to extend undergarment use under duress. Financially, this is merely extending the life of a depreciating asset. I am sure my mother would have refuted this concept. Nevertheless, before you judge me too harshly, allow me to share the situational details.
Three weeks ago our 7 year old washing machine, an example of aging capital equipment, began exhibiting signs of being possessed. Wash cycles were accompanied with grinding noises and violent walks across the floor. Spin cycles initiated poltergeist-like behavior, with heavy banging and metallic thuds made by nether-world demons.
An internet search revealed the probable cause of the machine’s paranormal behavior, which was likely broken suspension rods or damaged shock absorbers holding the inner tub in place. After watching 8 or 9 YouTube videos, I decided that I had the inner fortitude to de-demonize our beloved washing machine. And being thrifty, I wished to avoid the major capital expenditure of replacing the washer.
I consider myself handy and even pride myself on the 65% success rate for fixing household appliances. Yes, I freely admit that past performance is no guarantee of success. However, since I was attempting to maintain my existing emergency fund, I ordered new drum springs; at 7 years old it seemed financially responsible to repair rather than replace the machine. Upon arrival of the rods, I subsequently installed them in a mere 3 hours (I like to think of myself as methodical, rather than speedy). With a screwdriver in hand, one bruised elbow, and my pride on the line, I separated the whites from the darks and ran a load. Success!
Unfortunately, the clean clothes ran up against another obstacle. Our 10 year old dryer must have been jealous of the attention its utility counterpart received. What are the odds that both a washer and a dryer would malfunction in the same week? Call it correlated asset failure. In my house, in hindsight, the odds were pretty darn high. One appliance repair was manageable. Two was beginning to feel like collusion between utilities.
To make matters worse, the washing machine was only functional for two loads. Just because you can purchase parts on the internet does not guarantee long term utility after installment, in essence rendering my original repair invalid. Sunken costs for a depreciating asset. In this case, I probably broke a plastic piece holding the inner tub while replacing the springs.
Unfortunately, I was lulled into a false sense of security, and was outside the house when those diabolical mechanical fiends struck again. When I returned, the washer was in full demonic dance, this time mischievously thumping our 17 year old water heater. The water tank wanted no part of the dance, and promptly sprung a supply line leak. Great.
In hindsight, advocating for a larger emergency fund balance would have been prudent for someone like me with a known 35% failure rate.
I ran to the big box store to purchase a new pipe and some sealing tape, but silly me, I forgot to take measurements of the tank and valves. I called my wife in the parking lot to assist. My mistake was to ask her to check if the tank’s intake valve was functional. It was not, evident by her high pitched scream and the clear sound of water gushing. Note to self: remember to shut off the main water supply before asking the wife to help with water tank issues.
Did I mention that our daughter’s future in-laws were coming to dinner the next day?
In the end, we purchased a new water heater and were only without water for two days. We also purchased a washing machine, but it took roughly three weeks for delivery, as we required a difficult footprint size to fill the space occupied by the previous device. Our emergency fund survived, albeit at a lower level than anticipated. As a side note, I was able to fix the dryer, for the most part, so that a full replacement was not necessary.
The experience taught me a few lessons. First, household financial risks may appear independent, yet often this is not the case. It was easy to fathom we had our unexpected events covered with our existing emergency fund. Yet compounding systemic appliance failures pushed the unexpected expenses towards our theoretical limits. Second, my father was only partially correct. Underwear is not a renewable asset.
I should also think about establishing a separate Fruit of the Loom reserve account to accompany our current emergency fund. A decision my mother would have approved.
Jeffrey K. Actor, PhD, was a professor at a major medical school in Houston for more than 25 years, serving as an academic researcher with interests in how immune responses function to fight pathogenic diseases. Jeff’s retirement goals are to write short science fiction stories, volunteer in the community and spend time in his garden. Check out his earlier articles.
My wife has an unwavering philosophy- when it gets old, replace it before it doesn’t work. Fortunately, she hasn’t applied that to me as of yet.
I read your article at 5:30 AM and it will no doubt upset my day, not the article but how it relates your trying to fix an appliance, running to the store, buying parts, yikes. With my absence of any mechanical skill, your experience is very traumatic.
In any case, we replaced a 25 year old hot water heater, not because it broke, but because it was 25 years old and it was in our house 300 miles away. We also replaced a fridge, a dishwasher and a stove in our condo for the same reason, not at 25 years, but 15.
We replaced a hot water heater because several of our condo neighbors had to replaced theirs when they started leaking (the hot water heater, not the neighbors).
They were all the same age – 14 years. A few days after calling to have a new one installed ours sprung a leak as well.
It costs money, but avoids a mini crisis of doing without one or the other. There is a reason manufacturers provide a warranty for a limited number of years.
I will go to great lengths to avoid entering a big box store, not because I am a snob, but for me it’s like a person with claustrophobia entering the catacombs. That’s me too, and I did that and still shake thinking about the experience.
Just shy of two years after we bought a new dryer it started acting up. We brought in a repairman and the estimate was several hundred dollar. The manufacturer’s warranty? One year. But because we bought it with our Chase credit card the card doubles a manufacturer’s warranty up to two years after purchase. We, meaning my wife, jumped on working with the credit card company and the repair costs were reimbursed.
We have purposely bought everything with our credit card for years, one for the points, and two for the extended warranty. This is the first time we have utilized the extended warranty.