Question: Steve in Pennsylvania says his wife wants to spend $20,000 to fix the siding on their home. He isn’t sure whether he should agree on spending that much money. Dave reviews whether this will be a wise investment in the home.
Answer: There are several ways to look at whether or not this should be done. The first thing is to ask if you have $20,000. You say that your home is valued in the low end of the neighborhood and is worth between $210,000 and $250,000. Replacing the siding will probably be all right from an investing standpoint. It probably won’t make your home value go up by $20,000, but if you don’t do it, the home might start to lose value if the current siding is ragged.
It’s not a bad investment in that sense, and you have the money. Other than the fact that you are just a good, healthy tightwad–by the way, I like that–but other than that, is there a reason not to do this? You just got a little sticker shock from this. But you’ve got several bids and the reality of it is that this amount is what it’s going to cost.
It doesn’t sound unreasonable to me. It sounds like a reasonable investment. You’ve got the cash, and it’s a reasonable part of your income. If you told me you made $20,000 a year and wanted to do this, I’d have to take a breath. It sounds like a good plan.
The last thing that Sharon and I do in a big decision like this is decide what else we could do with $20,000. We could go on a cruise or buy a car. We could donate some to charity. Ask yourself if there is something else you’d rather do with this money other than just having it sit in savings. I think your wife would stick with her siding answer, but it’s a good way to challenge it and make sure that this is not an impulsive thing. But I’m on her side, and I don’t see a reason not to do it.