The immediate issue:
Our AC unit is 20 years old, still runs on R22, and is running very inefficiently. The furnace is 14 years old and was improperly installed originally, with no filter on the return duct, causing dirt, dust, and who knows what to get into the fan, which is not working very hard to little effect. Very little air is getting to the bedrooms (3 story rowhome, furnace in basement). The HVAC tech that we had in to look at it recommends complete replacement, of course (Option A, 13k). He also gave us a quote for replacing the AC unit and installing the filter on the furnace (Option B, 7.7k), and for just installing the filter and topping up on coolant (Option C, 3k). We can't afford to pay out of pocket for A or B without pulling from investment accounts, and are waiting to hear back about their financing options. I'm told most places offer 0% for this sort of thing, just have to find out the terms.
My first instinct was to take Option B, finance it as short a term as possible, and prepare to replace the furnace in a year or two. The downsides to this are, the AC still would not be very effective with the furnace fan still damaged, thought the filter will prevent the problem getting worse. Plus if the furnace fails in the winter, we have a worse situation, having to pay for a rush job in potentially sub-freezing temperatures. So now I'm thinking maybe A is worth it?
What would you do? Go with Option C and hope the system lasts another year or two? Option A and take the 0% financing and decrease savings goals to cash-flow the payments? Are there potential unintended consequences to B or C that I'm not thinking of? The choices are between Options A, B, or C, and between financing to cash-flow or taking out investment funds.
The extended issue:
We bought this house at the end of May, our first house. We had about 15k in excess of closing/DP costs saved for work that would have to be done - we knew the breaker box needed to be replaced/rewired, some shut off valves for the water and gas needed to be replaced, the water heater, AC, and furnace were all nearing expected end of life, and there were a variety of other projects that we expected to take on later down the line, but weren't urgent. Now, a month into living here, we've had to replace the water heater (corroded shutoff and pipes couldn't be replaced without replacing the water heater as well), the washer and dryer (broke the first time I tried to use them - we tried to DIY fix and failed), the AC and furnace might not make it another year, the damage to the retaining wall is significantly worse than we thought, the tiling in the shower was improperly installed, the vines at the back have damaged the plaster, there's evidence of old water damage in several rooms, etc. I expected many of these things, but I didn't plan for them to all happen in the first two months. It seems every time we turn around, there's something else that was shoddily done by the previous owners, or just wearing out.
How do you prioritize these kinds of things, to determine which need to be handled right away and which can wait? We've run through most of our set-aside funds at this point. Do we stop or decrease retirement contributions until the house is fixed? Pull from brokerage accounts? Delay repairs until we can save up the money without sacrificing savings goals?
And finally, how do we deal with family and friends and their inevitable nesting instincts kicking in? My mom wants to go furniture shopping with us and help us pick out a couch. My sister listened to our laundry list of upcoming projects and asked, "well, yeah, but when are you going to make it home and decorate?" All our relatives seem to see 'home' as furniture and curtains and throw pillows and decorative lamps. How do I explain to them that if the choice is between owning a couch and owning a furnace, I'd rather have the furnace? They know we have healthy savings, and don't understand why we can't have both. And by both, they seem to mean everything. Like, I'm sorry I haven't had time to hang art on the walls, I was busy re-caulking the shower.
Thanks for any advice!