Unexpected home maintenance repairs can be costly and financially draining if you are not prepared. You can’t avoid setbacks entirely, but you can make an effort to prepare for accidentals around the house. Setting aside money for an emergency fund is an excellent idea. Here are a few suggestions to keep in mind when budgeting for house maintenance.
How Much to Save For Home Repairs
There are standard expected home maintenance tasks and then there are unforeseen surprises. It’s wise to save adequately for the former by keeping track of the lifespan of various home features — windows, the roof, appliances, etc. Then, create a financial cushion for the things you can’t always predict, like a storm knocking a tree into your house or a pipe bursting.
It’s vital to account for these house expenses. You should start saving money for home maintenance as soon as you move in so you are not caught off guard. Set aside 1%-3% of your home’s purchase price for upkeep. You might want to save a little more for larger repairs, such as HVAC failures. It can cost around $5,000-$11,000 to replace your heating and cooling system.
One thing to keep in mind is your home’s age. The more modern your house is, the lower maintenance costs you’ll have. In addition, consider the climate. People who live in coastal areas should have a higher budget for flood protection. If you don’t know the current value of your home, budgeting based on square footage can be a good starting point.
Once you have a baseline cost, create a more detailed list. Go through your home and note the age and condition of each system. This will give you a better idea of how much money to set aside. Look at essential elements, like your furnace, air conditioner, plumbing and electrical.
Also, create a list of weekly and monthly maintenance tasks to complete, such as mowing the lawn or fixing minor leaks. Keep track of how much you spend on these chores each year so you can estimate for future funding. That’s the best way to customize your home maintenance budget to fit your needs.
Tips for Budgeting Yearly Home Maintenance
Here are a few tips to help lower your repair budget.
1. Have a Good Maintenance Routine
Set aside money for basic home maintenance. This can include the cost of replacing air filters, renting a power washer for your siding, and buying basic supplies like hand tools and cleaners.
However, you likely won’t take on maintenance alone. Therefore, this allowance should also include cash for annual inspections and cleanings, which can be essential for the HVAC system, garage doors, and other home features that require a level of expertise many homeowners may not have. For simple tasks, contractors in these fields may charge around $250 per day, but this pales in comparison to the cost of a full HVAC breakdown or emergency repair.
Keeping up with these house chores ensures your systems run longer, reducing long-term expenses. Plus, technicians can tell you how long your appliances and features are likely to last, helping you plan your budget.
2. Look Into a Home Warranty
A home warranty is an excellent option for new homeowners with limited cash. It is similar to an insurance policy. You pay an annual premium, commit to a service call charge and pick a policy. The plan covers your appliances from deterioration or failure due to age. Home warranty policies can be purchased at any time not just when buying a home.
The benefit of a home warranty is the service call has a set price. The fee often covers expenses for the visit, replacement parts, and labor. Just read the policy agreement carefully so you understand what is covered. Plus, keep track of any service records from previous owners.
3. Get a Proper Home Inspection
Get a home inspection done before you close on a new house. Even if the seller does one, hire your own inspector for extra clarity. The evaluation can help you see potential structural issues.
Many homeowners focus on cosmetic items, like modern kitchen appliances. However, it’s essential to allocate for more significant expenses. The inspection also gives insight into neglected care and items that need repair. Once you know what needs attention, you can factor this into your negotiation and the purchase price when buying a home.
4. Take Advantage of Technology
Online tools can help you budget for home maintenance more effectively by allowing you to manage and track your money. This can be as simple as keeping a spreadsheet of expenses to make calculations about total costs. You can also try downloading financial management apps that help you sort and categorize your expenses. Some online resources even help you track your purchases and monitor your goals.
You may want to consider setting up a separate account for home maintenance and use automatic transfers to save a percentage of your income without having to take purposeful action. This makes it easier to stay on top of budgeting if you find saving difficult.
Stay on Top of Home Expenses
Regular maintenance is a part of owning a home. Keeping up with it ensures your appliances run smoothly extending their lifecycle, although it is inevitable things break down with age. Follow these tips to budget for home maintenance effectively so you’re prepared for whatever comes your way.
Guest article written by Evelyn Long is a Baltimore-based real estate writer and the founder of Renovated, a web resource for home improvement and market trends.