It’s important to set aside some money for home maintenance each year to prevent unexpected costs from becoming unaffordable disasters.
Plan on saving a consistent amount of money in a separate savings account solely devoted to your house. As much as possible, all of your maintenance costs should be paid for from this savings account.
To determine how much you should save, calculate 1–3 percent of your house’s initial price. This is the average cost of maintenance annually. So, owners of a $200,000 house should plan to budget $2,000 to $6,000 a year on ongoing upkeep and replacements.
Decide how much you’d like to save each year based on the rest of your family budget, and then divide that number by 12. This is the amount you should plan to save monthly.
Many savings accounts allow you to automatically transfer money from your checking account to a savings account. We recommend you set this function up to automatically transfer your desired amount to your house fund monthly. Then sit back and watch it grow!
Keep in mind that starting a house fund does more than prevent a budget busting repair. Routine maintenance can actually make you money! When you’re ready to sell your home, appraisers factor in your property’s economic age – the number of years a house is expected to survive – when valuing your house. So, routine maintenance will increase your home’s resale value by as much as 1 percent a year! To learn more, read: The Value of Home Maintenance.