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Budgeting for Home Repairs and Maintenance

Budgeting for Home Repairs and Maintenance

If you own a home, then you know that repairs and maintenance can be expensive.  But just how expensive, on average, are these repairs?  And how should you budget for these home repairs and maintenance?

Just off the top of our heads, we’ve come up with a list of maintenance and repairs that aren’t uncommon.  They include:

  • Budgeting for Home Maintenancenew roof – every 20 years
  • siding – every 10-30 years
  • driveway repair and replacement – every 20 – 30 years
  • furnace tuning and replacement – every 15 years
  • air conditioning replacement and service – every 15 years
  • window and door replacements – 25 years
  • carpet or refinishing hardwood floors – every 5-10 years
  • kitchen cabinet refacing, repairs or replacement – every 15-30 years
  • Landscaping updates and fresh rocks – every year
  • plumbing fixes – every few years
  • staining deck – every few years
  • painting or staining any sheds or other structures – every ten years
  • air duct cleaning
  • carpet cleaning
  • costs of mowing and snow removal
  • general repairs that result from wear and tear or from accidents
  • ant or termite infestations
  • erosion repair
  • fence painting, repairs or replacement

As you can see, we’ve compiled quite a few high cost home repair and maintenance expenses here.  You’ll notice that nearly all of the large expenses at the top of the list are expenses that only come up every 15 to 25 years.  That means that a large majority of your expenses will likely arise when your house is about 20 years old.

How to Budget for Home Repairs and Maintenance

So how does one actually go about budgeting for these expenses?  You can start by having an emergency fund for anything that comes up and has to be repaired immediately.  However, over the years, you should either build your savings account up to cover these repairs or you should start your own home repair and maintenance fund by budgeting a hundred or so dollars each month.

We looked around and have found a rule of thumb that maintenance expenses typically range from between one and three percent of your home’s value each year.  Here’s what the blog Frugal Confessions had to say about these costs:

But homeownership is not all lemonade and hummingbirds; it comes with financial responsibilities. A figure you will hear thrown around is that you should expect to spend around 1%-3% of the home’s value each year on maintenance. This is above and beyond the down payment, mortgage, insurance, and property tax. It seems fitting to discuss our own experience with this while a plumber is downstairs cutting a hole through our living room ceiling. I just took a peek, and was slightly horrified when he peeled back the soggy plaster where dry, coarse material should have been and a gush of water hit our floor. The grim news is that it will cost an estimated $700 to fix (that is unless we want to leave a 5 gallon bucket where our coffee table should go). The good news is that we listened to the experts and have purposefully built up an emergency fund/house fund to deal with issues such as this….

You can find the rest of the article here at Repairs to Our Home: Have We Spent the “1-3%” in Maintenance over the Last Two Years?.

How Much Will You Need to Budget for Annual Repairs?

Now, let’s apply the rule of thumb to some hypothetical figures in order to understand how much money you’ll need to budget.  Let’s say that you have a $300,000 home.  According to the rule of thumb, you’d need to budget between $3,000 and $9,000 per year for repairs and maintenance.  Does that seem reasonable?  For a new home, you would likely be on the low side of this range, but for a home hitting the 20 to 25 year old mark, $9,000 doesn’t seem unreasonable.  So, I guess I can buy into this rule of thumb.

So in our case above, you can back into a monthly budget amount based on how new your home is.  If your home is new, you can probably get by with saving about $3,000 per year.  That means you’d want to save about $250 per month.  Now that I think about it, that might be a little high, unless you are paying for your lawn to be mowed and your grass fertilized, then you could easily spend that.  On the other hand, if your house is getting older, you should shoot to save closer to the three percent, or in this case $9,000 per year.  That means you’d have to save $750 per month to cover the big expenses when they arise.

Should You Budget in Advance or Just Pay From Your Savings?

I’m not sure how many people actually make a specific budget for home repair and put it into a separate fund to be used solely for this purpose.  I know I don’t, but I do make sure I have a savings that can cover the expenses that I need.  Whether you should make a separate fund for this expense depends on how prepared and organized you like to be.  It’s really a personal preference whether you save in advance or pay as you go.

The important thing to takeaway from this article is that home repairs and home maintenance is expensive.  If you do nothing else, you should at least calculate how much one to three percent of your home is and use it to help plan for the future.

{ 3 comments… add one }
  • Tyler April 18, 2012, 11:43 am

    I agree. The rule of thumb is about 1% of the homes value, but it depends on the number of appliances, age of the house, how much of a DIY’er the home owner is, etc.

    • Chris April 26, 2012, 5:58 pm

      I’m guessing home repairs are close to 1% while the home is newer and 3% or more when it reaches 20 years old. But you’re right that it depends on whether you fix things yourself or not.

      My wife has a friend in Northern California that just completely remodeled her kitchen after only 5 years in their brand new house. Sounds ridiculous to me but it’s all about how people live and where they spend their money. I’m guessing the 1% rule is for those more frugal people like me.

  • Dan May 12, 2012, 8:54 pm

    Thanks for the thorough list. For a potential first time homebuyer like me, it’s helpful to know how much should be budgeted for repairs. I’ve seen that some repairs are becoming more affordable though. A company here is offering some very affordable foundation repair.


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