Author Topic: Replacing HVAC Units - Avoiding Depression  (Read 4171 times)

Beach_Stache

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Replacing HVAC Units - Avoiding Depression
« on: January 25, 2016, 07:01:12 AM »
So our heat just went out downstairs and the company that came out told us we needed new HVAC downstairs.  It is a company referred by a close friend and this person lives in the neighborhood and I honestly think he is taking care of us.  We knew the HVAC was very old and not well maintained when we moved in 2.5 years ago so we knew it was a matter of time.  Of course they recommended that we do the upstairs as well (we have a dual zone unit) as that's about to go and inefficient, so that's a new HVAC for downstairs, new AC upstairs and a new furnace upstairs.  Everything out the door is $13,800 for 14 Seer dual zone in a 2800 square foot house.  It's hard to really find out if that's a good deal or not through research online, but it seems somewhat reasonable.

So that basically taps out the majority of our cash savings.  That savings is for emergencies like this and we have planned for the HVAC to be failing around this time, so I'm trying not to get too emotional. 

How do you all deal with a necessary purchase like this that basically drains you?  We have 3 young kids and while we are not completely Mustacian I feel that we do a very good job of maxing out or savings and retirement and looking towards the future.  We knew this day would be coming but I find myself getting very depressed having to cut the check, and it's tough doing so well and saving for so long just to have a big hit that cuts you down all at once. 

Thoughts on how to move past this?

Papa bear

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Re: Replacing HVAC Units - Avoiding Depression
« Reply #1 on: January 25, 2016, 07:11:01 AM »
Can you get more specific on what you're getting?  That quote seems pricey to me.  My guy will do a new furnace, AC, air handler, and coil for 4-5k   

I'd shop around and get other quotes. 

Other than that, see if anyone will work out a payment plan - 0 interest only of course, that might be more reasonable for you to not have to drain your emergency fund.  Even if it's a 6 month payoff, you should have some working capital add back to the pile.


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sjc0816

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Re: Replacing HVAC Units - Avoiding Depression
« Reply #2 on: January 25, 2016, 07:13:13 AM »
I would personally only replace what is actually broken rather than the entire system just based on their recommendation.  We replaced our furnace back in 2009 for around $4-5k I believe. That will soften the blow for you.

I do understand how you are feeling though.  We save as much as we can in retirement vehicles, have young children and a single income....so building up cash reserves is our biggest challenge.  We managed to save 15k and were hit with 8k in unexpected house expenses in the last 12 months and it definitely was a blow.  We are building it back up and were happy to be able to cash flow those expenses but it makes us nervous to cut our emergency savings in half and are just hoping we can get it back up quickly (I took on some additional freelance work, etc) before another unexpected expense.  Having old cars just adds to the nerves since we know they could require repairs at any time. Things like this will always happen and this is why it's so important to have emergency funds.

Beach_Stache

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Re: Replacing HVAC Units - Avoiding Depression
« Reply #3 on: January 25, 2016, 07:20:19 AM »
We have a dual zone, so separate HVAC for downstairs and then a separate unit for upstairs AC and a furnace upstairs for the heat.  So separate thermostats and everything.  They are 2 ton units each and will be 14Seer.  They are basically replacing everything except the tubing.  I guess I am a little niave to replace the upstairs as well, but he said it would save us around $2k just to do it now as he'll just charge me for the unit and not the labor.  I know it's a of salesmanship but he's a neighbor and came on a recommendation, has really good ratings and seems reasonable.  Maybe we should have just left upstairs alone and let it go as long as possible, but I'm nervous that it'll go in another year and we'll then have to spend $2k more than our current quote.  He explained that just by having the pilot light constantly lit on the old furnace, that's costing me $30/month just to keep it lite, not to mention the reduced costs in energy.  Would it be worth the risk to just do the downstairs, knowing that it'll be $2k more expensive than currently quoted if we wait and it goes out later this winter or the following year?

Jmoody10

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Re: Replacing HVAC Units - Avoiding Depression
« Reply #4 on: January 25, 2016, 07:22:04 AM »
This seems very pricey. What is the tonnage of the unit?

We are building a house right now and the entire HVAC cost for ducting, single 3 ton unit (dual zone) was $10,450. It is a 16 seer. We are hot/humid so no furnace.

homelesshobbit

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Re: Replacing HVAC Units - Avoiding Depression
« Reply #5 on: January 25, 2016, 07:25:48 AM »
Chase Slate has an introductory 0% for like 15 months I think? It's an option if they do not offer financing.

FrugalFan

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Re: Replacing HVAC Units - Avoiding Depression
« Reply #6 on: January 25, 2016, 07:32:08 AM »
I know he is your neighbor but I would definitely still get at least two other quotes. This is a lot of money and so it's not just about being nice. And I agree, that is a huge blow to the finances. One suggestion for the future, can you build up separate funds that way it might not hurt as much psychologically? For example, we have an emergency fund that is for things we cannot predict might happen, but we also have a house repair fund and a car replacement/repair fund. I think I would feel better about spending from these funds than from my emergency fund even though it's still the same amount of money.

Le Poisson

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Re: Replacing HVAC Units - Avoiding Depression
« Reply #7 on: January 25, 2016, 07:33:14 AM »
We're in a similar spot to you Beach. ie. Not entirely mustachian, but doing the best we can.

Big things like this can be very emotionally draining. I don't blame you for sounding a little defeated, but what is more important is to consider where you would be if you hadn't been saving. Then what? $14,000 on a 5 year plan? 10 year plan? 15 year plan - many of these plans are timed so that just as you are done paying out the debt, your furnace once again dies and you left feeling defeated all over again.

Since you have cash you have options.

1. Call the local utility (Gas? Electric?) and find out what options they offer. There may be a rental option or a payment plan that will have lower interest than buying outright. Rental plans often carry a maintenance plan on them so next time you can file this under "not my problem". Once you have all the options, fire up excel and work out which has the lowest lifetime cost, and what rental/payment plans look like versus the value of your money sitting in an investment. Now make a choice based on dollars and not emotion. Being able to make this choice is a luxury.

2. Decide whether you even need central heat. WHAT!?!? You crazy mofo! - Not really. Heated houses (even in Canada) are a pretty modern luxury. People were living off woodstoves up to about 40 years ago. I've had 5 houses, and only the current one has has a central heat system. A small house with a good layout can be heated quite nicely with a woodstove and a few cords of wood. Other options I've lived with that worked just fine included:

- Gas Fireplace with blower
- Oil-fired radiant wall units (not recommended - stinky and poor heat, especially in an uninsulated 1930's bungalow)
- Baseboard heaters - likely not an option unless you want to rewire your house
- Woodstove - messy, inconsistent heat, but worked fine. Brought home 2 babies in a house heated exclusively by one little woodstove in the living room. They're both just fine.

3. Take this opportunity to re-evaluate the system you have and see what chances there are to tweak it. Maybe that fancy-pants dual zone system isn't as efficient as it could be. Maybe the upfron expense of fixing it now will repay you in new efficiencies. Maybe you really want to switch from gas to electric, etc. is there another system that you can put in that would be more efficient/less costly to operate. This can mean this is actually a blessing.

4. With a decision made on your best option, research the install like hell and see how much of the work you are comfortable doing. There are many knowledgeable folks here who will help you,but there are also other really good forums to ask for tips and tricks on. You may not be able to do the whole job, but you may be able to reduce costs by doing a portion of the work. Or by being a helper/gopher to your contractor.

Once you've narrowed down all your options, and the house is running again, make a plan to recharge the emergency fund. This must be a family effort unless you want to feel like its always up to you to fix the finances. Momma and I have acknowledged that when the funds crisis hits, I find extra income, and she finds extra savings. Its how we roll. We don't have a ridiculous savings rate, but we have an emergency fund big enough to replace a car, and we have the ability to pump our earnings and savings into emergency mode when needed.

A few years back, we had a small landscaping project morph into a $25,000 pool rebuild. We were sweating the money going into the back yard, and crying. Just as the landscaper wrapped up laying in a new pool deck and liner, the AC unit on our house died. It was the straw that broke the camel's back. I felt utterly defeated. We got out of the house for a week (went to a family cottage) came back, and kicked our savings plan into high gear. Today I appreciate the yard for all the work that went into it, and I love that we never had to go into debt to do it.

Beach_Stache

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Re: Replacing HVAC Units - Avoiding Depression
« Reply #8 on: January 25, 2016, 07:59:59 AM »
Wow, the backyard looks great!  Thanks for the support.  We tighten our belts pretty well and while my wife wouldn't call herself Mustacian she really is and my support helps her :)  She was giving herself a hard time yesterday for getting Starbucks coffee once/week when it's really her only vice.  So we're both on board w/savings and do pretty well saving as much as we can after maxing out our Retirement and paying tons of money each month for daycare costs...  I did bring up if we should only do the downstairs but the Mrs. said she would rather just do it all now, rip the bandaid and leave it behind us w/piece of mind, which I understand.  I guess the good news is we still do have some cash left over after this and the only debt is some small student loans the Mrs. still has and the mortgage.  If needed we could always cut back on the extra payments to the mortgage (about $600 extra/month) since our rate is 3.75%, so you could argue that we're making a bad decision by paying it off early since it's only 3.75%, however the last year w/the Market being what it is it actually turns out to be a pretty good decision.  I guess I shouldn't be complaining, and my wife keeps me grounded in that we're lucky that we don't need to take out a loan for this, it's just frustrating to get knocked down like this.  I guess you need things like this though from time to time to refocus on how well you have it as well as other things you can be saving on.  It certainly did make us start talking again about how to tighten up, which is always a good!

big_owl

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Re: Replacing HVAC Units - Avoiding Depression
« Reply #9 on: January 25, 2016, 08:36:18 AM »
That all seems like a pretty legit price to me assuming everything they've quoted actually needs to be replaced.  We have a similar setup (dual heat pumps and airhandler/e-furnace blower units).  One went out a couple years back and we replaced with a 16 seer, cost to replace the "upstairs system" was about $7k.  Be glad they don't have to replace the tubing as well - a lot of the newer HE units won't warranty with existing refrigerant lines.  We now have refrigerant lines running up th eside of the house because it was the only way to get them into the attic where the air handler on the upstairs split is.  You could always just replace what you need to and hope that you get a couple more years out of the other unit - with one still working it's not like you'd freeze to death if the other crapped out over the winter. 

This is one reason why I like to keep a much larger cash cushion than it seems like most on these forums do.  It's all fun and games until you get hit with something like this.

Retire-Canada

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Re: Replacing HVAC Units - Avoiding Depression
« Reply #10 on: January 25, 2016, 09:11:43 AM »

So that basically taps out the majority of our cash savings.  That savings is for emergencies like this and we have planned for the HVAC to be failing around this time, so I'm trying not to get too emotional. 

How do you all deal with a necessary purchase like this that basically drains you?  We have 3 young kids and while we are not completely Mustacian I feel that we do a very good job of maxing out or savings and retirement and looking towards the future.  We knew this day would be coming but I find myself getting very depressed having to cut the check, and it's tough doing so well and saving for so long just to have a big hit that cuts you down all at once. 

Thoughts on how to move past this?

If you planned to have the HVAC replaced about now and that is what the cash savings are for then just spend the money according to plan.

However, if you planned to have it replaced and it will take away your emergency fund to do so then you didn't plan very well or at all. Part of the planning process would be to get an estimate so you can save the required $$ and have it ready. 

If you knew the HVAC would need to be replaced and didn't get and estimate and didn't save extra for it then I'd argue you didn't plan anything at all.

An emergency is something unforeseen that happens you. Having 2.5yrs to deal with an ageing HVAC unit that is a known problem is not an emergency and shouldn't be using your emergency funds to deal with.

Drifterrider

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Re: Replacing HVAC Units - Avoiding Depression
« Reply #11 on: January 28, 2016, 05:38:18 AM »
So our heat just went out downstairs and the company that came out told us we needed new HVAC downstairs.
Thoughts on how to move past this?

1.  Check with www.irs.gov to see if the energy savings tax credit is still in effect.
2.  14 SEER is the lowest rating available.  How much is your electric bill?  How much of an up charge is a 16 SEER unit?
3.  Check with your bank about a low interest 2 year loan.  If you can get 2% loan for a new car I bet they will work with you on the HVAC (it adds value to your property).  I'm not talking about a HELOC, just a short term low rate loan.
4.  Get more price quotes (you don't want an estimate, you want a quote).

BlueHouse

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Re: Replacing HVAC Units - Avoiding Depression
« Reply #12 on: January 28, 2016, 06:00:26 PM »
Personally, I would take a recommendation from someone in the neighborhood, but I would have a hard time actually using someone in the neighborhood to do the work.  What if something goes wrong?  What if you end up having to sue for shoddy work?  What if there is a defective unit and then you feel badly that your neighbor will have to "eat the cost" for replacement?  I just prefer to keep business and personal separate, and that sounds like it may be getting too close for comfort.

No matter what, I'd get two other quotes from Angie's List, and check prices there.  And make sure this guy has an A rating on AL and see what other people have paid for similar units.

Mr. Green

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Re: Replacing HVAC Units - Avoiding Depression
« Reply #13 on: January 28, 2016, 06:09:55 PM »
The cost doesn't surprise me, especially if you're talking about two zones. We had lightning strike our A/C compressor outside a number of years ago and it cost $7,000 to replace that and the corresponding unit inside. Double that and throw in a furnace on top and I think the bill is in the right neighborhood.

zany

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Re: Replacing HVAC Units - Avoiding Depression
« Reply #14 on: January 28, 2016, 09:59:56 PM »
That price for two units installed does not seem too bad.   I replaced my furnace, condenser, and evaporator three years ago.  I did all the work and ordered unit online.  It was a 5 ton AC and total cost was about $2500.  It has been working great for three summers now.  Electric bills much lower.  Good luck.