How to Budget for Expensive Home Maintenance and Repairs

Summary

How to Budget for Expensive Home Maintenance and Repairs

Homeowners across the country know only too well that it’s not a question of if they will need to undertake extensive (and expensive) home repair projects but when. From leaky roofs to flooded basements, from HVAC systems that won’t cool to water heaters that won’t heat, homeowners know that every few years there's going to be something happening at the house that will require a substantial outlay of cash.

The only area of doubt, of course, is how to pay for these projects. Fortunately, there are strategies you can pursue now to ensure that those costly home repairs don’t send you to the poor house.

Percents: Financial consultants recommend setting aside 1% to 2% of the purchase price of your home each year for routine maintenance projects. If 2% seems too much, consider starting with less and working your way up. On the other hand, if your home has greater maintenance needs, consider budgeting more than 2%. The fact is you probably won’t need to repair everything at once, but it’s a good idea to have money set aside for when problems arise.

Taking Into Account: One way to ensure you meet those budgeting goals and that the money will be there when you need it is to set up automatic transfers specifically for home maintenance. Consider creating a separate home maintenance account at your bank and funding it with monthly automatic transfers. Give the separate account a nickname such as Home Maintenance and enjoy the peace of mind that will come with watching the balance.
Improvement Your Situation: In addition to ongoing maintenance and repairs, you will likely want to make home improvements over time, such as purchasing and installing new carpets, kitchen counters or windows. And then there’s potential upgrades to your home’s exterior, such as new landscaping and sprinkler systems. The home maintenance account can cover these costs as well but be careful how you spend those hard-earned funds.

Cut Expenses: Another way to ensure you have the funds on hand for these big household projects is to identify expenses you can cut from your monthly budget. Buying coffee every day or frequently eating out serve as prime examples. Once you've implemented these reductions transfer the amount of money you would ordinarily spend on those items weekly to your home maintenance account. You can also give the account balance a substantial boost by funneling any tax refunds directly into it.

Online Tools: There are plenty of online tools that can help you budget and plan your finances. These will help you do things like track your purchases, create a simple online budget and automatically monitor financial progress. These will make it easier for you to start putting a small amount aside on a regular basis to cover the cost of those inevitable home repairs.

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At Harmony Communities, we feel strongly that each resident has a sense of home. That they come home from work and feel pride in their environment and in their place in the greater community. That families are comfortable raising children in our neighborhoods, and that couples and singles know that they belong to something bigger than their four walls. In other words, we seek to create harmony within each community, making our communities not just passable, but peaceful, safe, functional, and beautiful.