Many people aspire to own their home. It’s a goal that represents financial stability and maturity. However, many homeowners overlook the importance of budgeting for home maintenance when considering the overall cost of homeownership. Regular maintenance is essential to keep your home in proper condition and avoid costly repairs down the line. Let’s review some home maintenance tips and ways to implement a financially proactive approach to help ensure a healthy and budget-friendly home for years to come.
The importance of home maintenance
One of the key aspects of homeownership is understanding some basic practices of caring for your home. Neglecting home upkeep can lead to more significant problems and costly repairs in the future. With each passing year, various parts of your home, both internal and external, will require repair or replacement. These maintenance needs can vary depending on factors such as the age of your home, weather conditions, climate, structural condition, and location. It is crucial to identify these potential maintenance needs early on to plan and budget effectively.
There are several factors to consider when anticipating regular maintenance to your home, including:
- Age: Major components of a home typically last up to 30 years. Knowing the age of components like the roof, the water heater, or the HVAC system can help you identify when they may be due for replacement or repair.
- Weather conditions and climate: Your home protects you from the elements, but that also means homes in regions with more extreme weather patterns may experience more wear and tear. Consider your climate when determining the effect weather has on home features like furnaces or windows.
- History: Just like people, all homes have a backstory—and they aren’t always good. The maintenance needs of older homes are often more affected by the previous owner’s level of care. If they installed or repaired something poorly, you may end up having to pay for it.
- Landscape: Staying on top of the trees, shrubs, and grass does more than just add curb appeal to your home. Houses constructed around tall trees, down in valleys, or near creeks and streams will likely require more maintenance. From leaves in gutters, roots in pipes, or even flood potential during heavy storms, a lovely lawn can quickly become an ugly problem if not maintained.
By considering these factors, you can gain insights into the potential maintenance needs of your home and plan accordingly.
Budgeting for home maintenance
Once you understand the importance of upkeep and have identified the potential maintenance needs, it is crucial to include it in your budget. Building an adequate budget should include your mortgage, utilities, and credit card bills, but people often overlook including costs of caring for a home in their budgets. While it may require some sacrifice in disposable income, budgeting for routine maintenance is essential to avoid financial stress in the event of unexpected repairs.
Rough estimate: Save a percentage of the home’s purchase price
One approach to budgeting for home maintenance is to set aside a percentage of your home’s purchase price each year. For example, if you purchased a home for $200,000, setting aside between 1% and 4% of the purchase price, or $2,000 to $8,000 per year, can provide a rough estimate of the necessary maintenance fund. The percentage you choose should align with your current monthly budget and what you can comfortably afford to save.
Rough estimate: Save money per square footage of the home
Another approach to budgeting for home maintenance is to save a specific amount per square foot of your home each year. This method accounts for the size of your home and assumes that larger homes will cost more to maintain. Setting aside $1 per square foot per year can provide a rough estimate of the necessary maintenance fund. If you have a smaller home, this approach can be less burdensome on your monthly budget.
More precise estimate: Life expectancy & replacement value
For a more precise estimate of anticipated home maintenance costs, you can take a detailed inventory of the major components of your home. This includes HVAC systems, roofing and siding, appliances, water heaters, fencing, windows, and doors. After listing these components, follow these steps to create a more accurate budget:
- Determine the age and life expectancy of each component. Research guides such as Scott Gibson’s guide on This Old House can provide insights into the expected lifespan of different building materials and systems.
- Research the cost of repair or replacement for each component.
- Rank the components based on their remaining life expectancy, prioritizing those that require attention soonest.
- Allocate a budget for each component accordingly.
While this approach requires more time and research, it provides a more accurate estimate of costs and helps create a long-term savings plan.
Financing home maintenance projects
Even with effective budgeting, unexpected home repairs or maintenance projects can still occur. In such cases, a backup plan for financing these projects is needed. One option is to consider a personal loan specifically designed for home improvement projects. Personal loans offer flexibility and allow you to finance your home maintenance needs without depleting your savings or disrupting your monthly budget. With a personal loan, you can address urgent repairs or undertake larger home improvement projects while making affordable monthly payments.
It’s never too late to start saving
Whether you’re a new homeowner or have owned your home for a while, there’s always time to start saving for home maintenance. While starting early is ideal, starting late is still better than not saving at all. The key is to commit to saving for home maintenance and find a strategy that works best for you. By prioritizing home maintenance and regularly setting aside funds, you can minimize the financial stress of unexpected repairs and ensure the long-term health and value of your home.
- Regularly inspect your home to identify maintenance needs early on. This can help prevent small problems from turning into major repairs.
- Create an emergency fund specifically for home maintenance and repairs to ensure you have funds readily available for anything unexpected.
- Compare quotes from different contractors and service providers before doing any home construction projects. This can help you find the best prices without compromising the quality of work.
- Routine maintenance, such as cleaning gutters, replacing air filters, and inspecting the plumbing system, can help prevent larger issues from arising.
This article is for educational purposes only and is not intended to provide financial, tax or legal advice. You should consult a professional for specific advice. Best Egg is not responsible for the information contained in third-party sites cited or hyperlinked in this article. Best Egg is not responsible for, and does not provide or endorse third party products, services or other third-party content.