As a homeowner, there are many expenses that you have to deal with. While your utilities will be your main expense, you also still have to worry about the other things. These include appliance repairs and fixing structural damage to your home. Here are some tips on how you can have money ready for when bad things happen to your house.
Be Aware of the Two Rules
There are two main rules that you choose when you want to start saving for home maintenance. The easiest rule is the one percent rule. This rule requires you to save one percent of your home’s value yearly for home maintenance. This is a bit general but it is very easy to do. For example, if you paid $300,000 for your house, you should save $3,000 a year for maintenance. Divide that every 12 months and you should have your savings for home maintenance. But you should constantly re-evaluate the value of your house. If it gets more pricey, then you should be upping your maintenance budget.
The other rule that you might find useful for saving is the square-foot rule. It is much more straightforward. It requires you to save a dollar for every square foot in your home. The larger your property, the larger your maintenance fund will be.
A good piece of advice would be to use the average of these two amounts so that you can get a decent budget.
Know the Difference
Many people make the mistake of classifying major home repairs and run-of-the-mill home maintenance expenses. This includes seasonal maintenance and cleaning duties. You can hire people for these using your fund. But people think that when they have a home maintenance fund that they are ready for anything that can happen. The truth is that a single major home repair can wipe out your fund that would normally pay for several months of maintenance. It is a good idea to separate the two funds so that you don’t lose the money you have for basic maintenance when you need a major fix.
For a major repair fund, you should match your basic home maintenance fund. This ensures that you only have to double your savings contributions which should be easy to consider
Consider Several Factors
When budgeting, there are also several additional factors that you need to take into account. The most important one is age. A new house built in the past few years will not require much maintenance except the most basic. But houses that are older than a decade will start to develop problems. The reason for this is that most building materials will start to degrade by that point. Even the hardiest kitchen countertop is going to last only 20 years.
Besides the house’s age, you should also consider the environment. For example, if your house is near the seaside, then you can expect higher maintenance costs. The sea air is full of salt that can damage your house’s exterior quickly. Other regions also have a variety of weather factors to consider like hard sunlight, strong rains, and even hail storms.
When calculating your maintenance budget, it is a good idea to add ten percent for each factor. An old house located in a very rainy region might expect a 30 to 40 percent jump in their maintenance budgets. It is better to be safe than sorry when it comes to money needs.
Keep the Fund in a Safe Place
While many people think that a jar or envelope somewhere in your house sounds reasonable, they are not that safe. Understandably, you want the money to be accessible but you can get the same results by putting it in a bank. You can even automate payments to it. Every month have your bank transfer the planned amount to your emergency funds. This ensures that you don’t forget and that it is consistent.
A great idea for these funds would be to find an account that has the best interest possible. You can then have the funds earning money while you don’t need them. If you are lucky, then you won’t be needing them for some time. But if something bad happens, then you have them ready with a bit of extra added on.
Home maintenance is an important duty and requires quite a bit of money to do properly. With the right savings, you can ensure that your house will look great and have everything functioning well. Start saving now so that you can be ready for anything.