Everything you need to know about insurance basics, like coverage types, limits, cost and more.
How Much Should You Budget for Home Maintenance?
If you take a look around your neighborhood, you’ll probably see many different homes — and odds are some of those homes will look better than others. Every homeowner has their own style when it comes to maintaining their humble abode but one thing’s certain: taking care of your home as it ages is going to cost you. If you’re diligent about staying ahead of issues, you may pay a little more out of pocket every month, but in the long run you may wind up saving thousands.
Depending on how a home’s been cared for, you can expect to pay about one percent of your home’s current market value in annual maintenance expenses. The good news is there are ways to think about saving and budgeting for the inevitable repair or replacement of your home’s big-ticket items.
Do you know how much to budget for home maintenance? We’re here to help you narrow down that elusive number so you can manage your home’s budget with greater certainty.
Calculating How Much to Budget for Home Maintenance
So, how much should you budget for home maintenance costs? There are a few good rules-of-thumb to consider that can help you sock away cash for a day in the future when you’ll need it.
The 1 percent rule
There are many ways to consider saving up and budgeting for home maintenance costs. The 1 percent rule is a good standard because it’s so easy to remember. Just put aside 1 percent of the total purchase price of your home for home maintenance repairs. A $250,000 home would require you to save $2,500 annually, or about $209 per month.
It’s a rough estimate that doesn’t consider labor costs or materials, and other factors can contribute to this base price.
The square foot rule
Budgeting for the eventual breakdown and replacement of major home systems like a new roof or replacing a sump pump may not be easy, but it is possible. If you’re wondering about how to estimate property maintenance costs, the square foot rule can be helpful, and it’s another really easy way to put money away for repairs and home maintenance.
Budget about $1 for every square foot of livable space, every year, for annual home maintenance costs . And this rule is also applicable for estimating new home maintenance costs. So, a 2,500-square-foot home would require a $2,500 budget annually, or about $209 per month.
Set aside 10 percent
Another great way to budget for home maintenance is to put away 10 percent of your main monthly expenses every month. That’s 10 percent of your mortgage, 10 percent of your property taxes and 10 percent of your insurance costs placed into a savings account every month.
Suppose you’re spending this much every month:
- $1500 on mortgage
- $350 on taxes
- $200 on home, car and life insurance
10 percent of each of those figures is: 150 + 35 + 20, or a monthly savings plan equating to $205. Estimating your annual home maintenance costs can be difficult, but saving up that cash doesn’t have to be.
What Are the Hidden Costs of Buying a Home?
Although you may be ready to pay for upgrades after purchasing a home, many unexpected costs can surface right at the closing table. Want to learn more about what your potential home-buying costs might be? Check out our Hidden Costs of Buying a Home Calculator and feel more prepared, confident and ready for closing day!
There are a lot of ways to put away money for home maintenance and repair costs. The important part is that you do it, one way or another. When the time comes, you’ll have a head start on funding repairs for the replacement of your home’s major systems. Be sure to check out our home maintenance hub for tips and resources on how to maintain key areas of your home.