So you’ve finally bought your own home. Despite record home prices, more people than ever are becoming homeowners. That means that more people than ever also have to learn how to budget for home maintenance.
That’s right, saving doesn’t stop after you buy your house!
We’re here to offer a few tips that can help you start a good home maintenance budget. Read on to learn more.
1. Save 1%
While this isn’t always true (depending on the housing market and where or not you spent more than the true value of your home when you bought it), a good rule of thumb is to save 1% of your home’s value per year for maintenance costs.
For example, if your home costs $500,000, you’ll want to save $5,000 per year. It’s possible that you won’t spend this much on maintenance, but it’s a good idea to have that money set aside just in case.
Keep this money separate from your general savings account.
2. Keep Up With Routine Maintenance
It might seem counterproductive, but by keeping up with routine maintenance, you’ll be saving money at the end of the day. Always include routine HVAC work, plumbing inspections, and minor electrical work in your budget.
When you get routine maintenance, you’re preventing larger future problems. It’s far more expensive to fix something that’s broken than it is to maintain it while it’s still in good condition.
3. Consider Your Homeowner’s Insurance Options
Even with routine maintenance, serious damage can occur due to natural disasters or even freak accidents in the home. You should make sure that your homeowner’s insurance will cover you so you don’t spend tens of thousands of dollars trying to repair the problem.
Check out these coverage options to see if they apply to you.
Good homeowner’s insurance can be expensive, but just like routine maintenance, it can save you money in the long run.
4. Continue Adding to Your Maintenance Budget
It’s tempting to stop contributing to your maintenance budget once it hits the 1% mark, but we recommend continuing to save money even if you never need to dip into that budget. Let the money carry into the next year.
You don’t have to save as much if you already have that baseline budget, but by contributing even a small amount every month, you’ll protect yourself from major problems that homeowner’s insurance won’t cover.
5. Remember Everything That Goes Into Maintenance
Many new homeowners aren’t used to having to maintain their own homes. They’re used to landlords doing it for them. While homeownership comes with plenty of benefits, the major downside is that you’re not responsible for keeping your home in good condition.
Among other things, you’re going to have to consider:
- Roof maintenance
- Pest control
Not all of these will be frequent maintenance issues, but they do all cost money. The ones that are longer-term investments (like roofing and flooring) are going to be more expensive (another great reason to continue contributing to your home maintenance budget after the 1% mark).
Is Your Home Maintenance Budget Under Control?
If you don’t already have a home maintenance budget, it’s time to start one. The home maintenance costs associated with recurrent expenses and major repairs can be shocking!
For more helpful articles all about maintaining a home and more, visit the rest of our site.