Homeownership comes with more expenses than just property taxes, insurance and utilities. There are also ongoing maintenance needs, such as yearly gutter cleaning or draining and refilling the hot water heater.
Unexpected repairs and replacements can be costly, but having money set aside can help minimize these expenses. Here are 5 budgeting tips for your home maintenance needs: 1. Ensure you track and manage your home’s repairs. You will need to know “Do home warranties cover roofs?” By educating yourself, you will be better prepared to attend to your home maintenance needs.
- Set a Goal
There are certain maintenance expenses that are predictable, such as yearly gutter cleaning or HVAC tune-ups. These can be planned for and help prevent costly repairs down the road.
However, other home maintenance costs are not as easily prepared for. For example, ice dams can lead to serious water damage in your ceilings and walls. They can also pull away from the roof and cause shingles to fall off.
The best way to prepare for unexpected maintenance expenses is to set aside money each year to cover them. This can help you avoid going into debt and can also ease the stress that comes with expensive home repair bills.
Make sure you and your partner are both committed to your budgeting goals. It will help you get to your financial destination faster if everyone is on the same page.
- Track Your Expenses
You can track expenses using a number of tools, from CMMS software to simply hanging on to receipts or checking your bank and credit card statements (online or paper) regularly. By gaining an in-depth insight into your maintenance data you can manage your budget more effectively.
A commonly cited rule of thumb is that homeowners should save 1% to 4% of their home’s value each year to cover maintenance costs. However, it is important to remember that this can vary depending on a number of factors.
Having money saved for unexpected repairs can help avoid financial stress and minimize the chances of having to take out a loan or rely on credit cards to meet your repair needs. It is also recommended that you prioritize your repairs, focusing on those that are urgent first.
- Create a Budget
It’s important to create a budget, especially when it comes to home maintenance. This will help you save more and avoid expensive, unexpected repairs.
Some costs are predictable, such as yearly gutter cleaning or HVAC tune-ups. However, other expenses are unpredictable and can add up quickly.
Generally speaking, experts recommend saving 1 percent to 4 percent of your home’s cost each year for upkeep. This estimate can vary based on your specific home’s age, location and other factors.
It’s also important to review your budget and expense tracker on a regular basis. This will ensure that your budget is up-to-date and that you’re still on track to reach your goal.
- Create a Savings Account
In addition to an emergency fund, it’s important for homeowners to set aside money for unexpected home repairs and maintenance. A general rule of thumb is to save 1% – 4% of your home’s value each year for this purpose.
However, this can be difficult to do if your home’s value is going up or down due to factors like a volatile real estate market. In these cases, some experts recommend using a square foot rule, where you save $1 for each square foot of your home.
Saving a small amount on a regular basis will help you avoid sticker shock when it comes time to make a big repair bill. It will also lessen the blow of unexpected expenses, allowing you to avoid costly borrowing.
- Create an Emergency Fund
It’s essential to create an emergency fund for unexpected expenses that arise. This way, you won’t have to resort to credit cards or loans to cover the costs.
One popular rule of thumb suggests that homeowners save 1% of their home’s value each year for maintenance. This figure is often misleading because it doesn’t take into account other factors, such as a home’s age and location.
To get a more accurate estimate, assess the condition of your home and learn the life expectancy of its components. Then, set aside a savings amount that’s appropriate for your unique situation. For example, a homeowner could create a savings account that’s based on their square footage. This approach would factor in the fact that larger homes cost more to maintain.