How Much Should You Budget for Home Maintenance?

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Home sweet home. It’s your place of comfort and where you unwind after a long day of work. It’s where your children will create their earliest memories. It’s a gathering place for the holidays and the culmination of hard work and planning. It’s also the place where a shower can feel like standing under Niagara Falls in the dead of winter when the water heater malfunctions!

Sudden malfunctions or breaks can put you in a financial bind and force you to have to make hard choices. You need a financial plan for home maintenance before things start breaking. Keep reading to learn how to manage home maintenance costs. 

The Difference Between Home Maintenance and Major Home Repairs

It’s important to understand that there is a big difference between home maintenance and major home repairs. Home maintenance is what you do regularly or periodically to maintain the beauty and functionality of your home. Major home repairs deal mainly with structural damage to your home or major plumbing and electrical issues. 

For example, getting your gutters cleaned—or doing it yourself—is a form of home maintenance. Getting your roof or the mainline to your plumbing replaced are both major home repairs. Major repairs are costly, with prices often skyrocketing to tens of thousands of dollars.

These types of emergencies may require more cash than you have available to you. Most contractors will work with you to help you get financing for these projects, but it depends largely on your credit. There are also online financial institutions that offer installment loans with no credit check

Home maintenance is less taxing on your wallet than major repairs and in many cases, prevents the need for major repairs. In other words, budgeting for maintenance can keep you from having to borrow for big fixes.

The 1-4 Rule

You’re acquainted with the phrase, “Hope for the best and prepare for the worst,” right? As a homeowner, it’s important for you to realize that nothing lasts forever, and everything has a breaking point. But you don’t have to wait for something to break to start filling your home maintenance war chest. Besides, maintenance done right is preventive.

Whether you’re in an old or new home, it’s imperative that you have a nest egg for unexpected malfunctions. A great way to prepare for home maintenance costs is setting aside a percentage of the purchase price of your home every year. 

What percentage of your home’s purchase price you should put aside depends on how old it is. For example, an owner of a new home should be okay putting aside 1% of their home’s purchase price. Being that it’s a new home—built from new materials—it shouldn’t require much maintenance. If your home is older than 20 years, then you should put aside around 4% because you’ll have more and higher maintenance costs.

The One Foot Rule

Another way to calculate how much you should save up annually for home maintenance costs is the one-foot rule. With this method, every year you put aside one dollar per square foot in your home. If your home is 2500 square feet, then you put aside $25OO every year for home maintenance. 

Many favor this method because it determines how much money you’ll spend on home maintenance by the size of the home. It’s a simple rule—more home equals more maintenance.

Where this rule is lacking is that it doesn’t take into account the age or location of your home. Just like property values in some cities or states are higher than others, the same is true of maintenance costs. A residential electrician in Dillsburg, PA will likely have a different price than one in Philadelphia. So if you use the one-foot model, make sure you adjust for the average cost of maintenance services in your area.

However you decide to budget for home maintenance, the goal is to be financially prepared to keep your home functioning. That’s how you protect your home and keep sudden maintenance costs from being a financial downturn.


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