3 Valuable Tips When Budgeting For The Costs Of Home Repairs And Emergencies

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The average homeowner spends $9,380 on home maintenance annually, according to Zillow and Thumbtack. While yearly costs like property taxes and homeowners insurance accounted for $6,327 per year, it turns out that homeowners can spend a tidy sum of $3,067 on hiring home professionals and home repairs- or higher in some states. For many, the largest hurdle to homeownership is saving up a downpayment and trying to avoid those costly home buying mistakes like skipping home inspections. However, your financial commitments do not end there, and thinking ahead to budget for major home repairs or emergency repairs can save you a lot of heartaches, interest costs, and worry in the future.

Use The One Percent Rule As A Loose Guideline

Most housing experts recommend saving 2 percent for home maintenance issues every year. This means if your home’s purchase price is $300,000, you should aim to save $18,000 annually for home maintenance. However, try to avoid relying on this as a hard rule. The amount you pay for repairs and emergencies also depends on the condition when you bought your home. For instance, new builds tend to have structural warranties for large ticket appliances like furnaces and water heaters already in place. Older buildings may not have an active warranty or their period may have expired. A quick search for how much a water heater leak repair cost puts the average figure at $506 but details like the age of your water heater will determine whether a repair is cost-effective in the long run. The cost of your repairs will also fluctuate based on the age of your home. Older homes can have more repairs on the timeline and a higher chance of emergency repairs- which means larger bills.
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Draft A Monthly Budget For Your Repairs

The best way to budget for home repairs and unexpected emergencies is to do so consistently by keeping home repairs sinking funds. Saving for home repairs in increments is much more achievable than having to finance it all at one time. A good way to approach this is to include a set percentage of savings in your budget every month dedicated to home repairs- similar to budgeting for your mortgage. According to Sharon Lang, a real estate agent, you can begin by budgeting up to 10 percent each month towards a home maintenance fund. Setting aside money each month also means you are less likely to rely on high-interest credit if an emergency repair did arise- saving money on home maintenance.

Do Your Research To Get Realistic Cost Figures

Finally, make sure your estimates are realistic when budgeting for home repairs. Again, while the 1 percent rule for home maintenance is a good guide it should not be your only source of budgeting for home repairs cost. To avoid being surprised when those costs do occur and keep your home budgeting accurate, run a quick search on the average costs of some home repairs within your area. If you have planned repairs in mind, you can use these details to get an idea of how much they will cost. A quick search on a home repair website or chat with a repair professional like a plumber can get you up-to-date estimates of the costs.
Owning a home comes with more financial responsibilities than simply paying a mortgage every month. As the homeowner, you will no doubt be faced will unexpected costs for home repairs and emergencies. While you cannot eliminate those costs, you can get ahead of them by planning and budgeting for them. Including them in your monthly budget, setting up a sinking fund, and using reliable estimates of those costs are just a handful of ways you can get started.
3 Valuable Tips When Budgeting For The Costs Of Home Repairs And Emergencies was last modified: by