One appliance a year, forever
Count the machines in an ordinary house that will need replacing: refrigerator, range, dishwasher, washer, dryer, microwave, water heater, furnace, air conditioner, disposal. That is ten, and if each lasts an average of twelve years then the long-run replacement rate is a bit under one a year. Every one of them arrives as a surprise in most households, and the surprise is the only genuinely avoidable part.
The method here is the one used for any wasting asset: price the replacement, divide by the expected life, and hold that amount every year. The result is not a prediction of when a specific machine dies. It is the average annual cost of owning the set, which is a real cost that is being incurred whether or not anyone books it. A house with ten appliances totalling eighteen thousand dollars to replace is consuming roughly fifteen hundred dollars a year of appliance, and the only question is whether that shows up in a plan or on a credit card.
The second output on this page is the one people find less comfortable. If your dishwasher is six years into a ten year life, sixty percent of its replacement cost has already been consumed, and a reserve that was being kept properly would already hold that amount. Summed across the house, that accrued figure is usually several thousand dollars, and almost nobody has it. That is not a failure so much as a starting position.
What expected life means and what it does not
Expected life figures circulate widely and they should be treated as rough medians rather than as specifications. Half of everything fails before the median and some fails a great deal before it. The distribution has a long tail in both directions: refrigerators that run for twenty-five years are common and so are ones that fail at six. Nothing on this page predicts which you have.
Several things shift the figure in ways worth accounting for when you fill the fields in. Usage rate matters — a washer in a household of five does several times the cycles of one in a household of two, and cycles rather than years are what wear it out. Water hardness shortens the life of anything that heats water. An appliance in an unconditioned garage works harder than one indoors. Complexity is a real factor: a machine with more electronics and more functions has more that can fail and its failures are more often uneconomic to repair.
The right way to use the life field is to enter what you expect from your machine in your conditions, and to revise it. If the dishwasher has already outlived the figure you gave it, that is information, and the honest response is to note that the reserve for it should be complete rather than to congratulate the machine.
Prices, and why the future one is higher
The replacement price to enter is what it would cost you to have an equivalent machine installed and the old one taken away, today. That is a larger number than the shelf price. Delivery, installation, disposal of the old unit, and any adapter, hose, cord or connector that turns out to be needed all belong in it. For anything that connects to gas, to a dedicated circuit, or to plumbing beyond a hose bib, the installation can be a substantial fraction of the total and it is licensed work.
The calculator inflates that price forward to the year each item is due, because a machine ten years out will not cost what it costs now. Setting the growth rate to zero puts everything in today's dollars, which is a perfectly defensible way to plan if you also intend to revise the numbers regularly. What you should not do is plan in today's dollars and then never revisit it.
One deliberate omission: this page assumes a like-for-like replacement. If the intention is to upgrade at the same time — a larger refrigerator, a different type of heating — that is a different and larger number, and it belongs in a purchase plan rather than a reserve. The big purchase checklist covers the questions that come with the upgrade version.
Where the reserve should live and what else belongs in it
An appliance reserve is not an emergency fund and confusing them is the common mistake. An emergency fund covers loss of income and genuine shocks; the appliances are a known, scheduled, arithmetically predictable expense that happens to have uncertain timing. Keeping them in one pot means every appliance replacement feels like an emergency and depletes the thing that is supposed to cover real ones. The emergency fund calculator sizes the other pot.
The same logic extends past appliances. A roof, a driveway, exterior paint, a water softener, flooring — all of them have a life and a replacement cost and all of them belong in the same kind of arithmetic. Adding them to the list on this page works exactly as it stands, and the totals get considerably more sobering. The home maintenance schedule is the companion piece, because most of what extends an appliance life is small, scheduled and cheap: cleaning a condenser coil, clearing a dryer duct, flushing a water heater.
Two other pages sit either side of this one. Before a failure, the running cost of the machines you already own is worth knowing, and the appliance running cost calculator plus the home energy audit guide cover that. At the moment of failure, the decision is not about the reserve, it is about whether this specific repair quote beats this specific replacement, which the repair or replace calculator settles on cost per remaining year rather than on any rule of thumb about percentages.
Questions people ask
How much should I budget for appliance replacement each year?
Divide what it would cost to replace each machine by how long you expect it to last, and add those up — which is exactly what this page does. For a typical house with ten appliances the answer commonly lands somewhere between a thousand and two thousand dollars a year, and it rises sharply if the heating and cooling equipment is included, because those are the two largest numbers in most houses by a wide margin. There is no percentage-of-home-value rule that beats simply listing what you own and pricing it.
Should the furnace and air conditioner be on this list?
Yes, and leaving them off is the most common way this exercise produces a comforting but useless number. They are frequently the two most expensive items in the house after the roof, and their replacement is not optional in the way a microwave replacement is. Include them with realistic installed prices rather than equipment prices, because the installation on heating and cooling equipment is a large share of the total and it is licensed work. If you own them, they are consuming their life whether or not they appear on your list.
What if something is already past its expected life?
The calculator shows those items with zero remaining years and counts their full replacement cost as already accrued, which is the honest position: there is no remaining time in which to save for them. It is not a prediction that they will fail this year. Appliances routinely run well past their median life, and an old machine that works is doing you a favour every month it continues. What the zero means is that this is money you should be holding now rather than planning to accumulate, and it is the reason to look at the backlog figure rather than only at the monthly one.
Is a sinking fund better than just buying an extended warranty?
A reserve covers every appliance in the house against every kind of failure for as long as you own them, and anything you do not spend stays yours. An extended warranty covers one machine, for a limited term, subject to its own exclusions, and the price includes the seller's margin and the expected claims cost, which is why they are profitable to sell. The arithmetic favours self-insuring across a portfolio of ten items, which is what a household of appliances is. The case for a warranty is narrower: a single item whose failure you genuinely could not absorb, which is rarely a dishwasher.
Should I include appliances the landlord owns, or ones that came with the house?
Include anything you would have to pay to replace, and nothing else. In a rental, that is usually none of them and this page is not for you. In an owned home, everything that is not structural and not the landlord's is on the list regardless of whether you bought it or inherited it with the house, because inheriting a fifteen year old water heater means inheriting the obligation to replace it, usually sooner than you would like. An inspection report from the purchase often has ages on the major equipment and is the best source for the age field.