Our daughter and son-in-law bought a house almost exactly a year ago. It was built in 1999 and came with a homeowner's warranty. Their question to me was should they renew their warranty at a cost of $600 a year? Like everyone else, they're looking at ways to cut back but they're also concerned about appliances breaking down.

My recommendation to them was to take the $600 that they would spend towards the renewal of the home warranty and put it in a separate savings account labeled "Appliances". Then they should also get a contract to have their central air conditioner, gas furnace and water heater inspected and maintained twice a year -- something that will generally extend the life of those appliances significantly.

If they put $600 in this account each year, they will likely come out ahead and will be able to budget for anything that needs replacing.

Take a look at the Demense.info to get an idea of the average life-span of appliances and major systems in your house. This can help you plan your appliance and major systems replacement budget.

(C) Susan Pruden.