Home repairs can be costly and many are unforeseen expenses. Routine home maintenance aside, are you prepared for unexpected home expenses?

Most people, when deciding to buy a house or creating a budget, account for the mortgage payment, taxes and insurance. But, did you include a home repair line item in your monthly savings plan? Unexpected home repairs can be very costly and could seriously affect your financial life if you haven’t saved up in advance (or designated a low-interest loan account to borrow from). Here are some solutions to avoid home repairs throwing you into financial distress.

Experts recommend putting aside either two percent of the home’s purchase price or one dollar per square foot in savings each year. For example, a $400,000 house price would suggest an annual savings of $8,000. Alternately, a 4,000 square foot house would suggest $4,000 in savings. Of course, some years you may not need to spend anything, but you never know when a pipe will burst in a cold winter freeze or if that air conditioner will quit in August. Having a savings cushion will take the strain out of repair and replacement costs.

Another way to pay for home repairs is by financing them. While not the first-choice method, this can be used effectively if savings are not available. Low or zero interest credit cards can be used to pay off expenses in the short term. The problem with these loans is that they typically have a very short pay-off period and when that expires, the interest rates are sky-high. A more viable option could be a home equity line of credit. Check with your personal bank or mortgage lender to see if you qualify for this type of loan, which tends to have a much lower interest rate and loan periods of upwards of ten years or more. As a bonus, interest paid on home equity lines of credit are tax deductible.

Whichever method you choose, put it in place now, before that roof leak or broken hot water heater expense hits!