Homes require maintenance, repairs, and renovations, but how does the typical homeowner afford the costs associated with such major undertakings? Financial guru Dave Ramsey says you do it by creating a sinking fund that you put money into and only withdraw when a genuine home emergency occurs. Let’s consider how to finance this account and reduce the costs of maintaining your home.
Funding Your Home’s Maintenance and Repairs
Create a separate savings account for your home maintenance. Calculate how much a typical year’s maintenance will cost. Each year, homeowners spend between 1% and 4% of their home’s value on its upkeep. If you own a home valued at $100,000, expect to spend between $1,000 and $4,000 each year to maintain it.
Without that amount already saved, it might seem a lofty sum. Divide it by 52 weeks, and you realize that you only need to deposit $19.23 each week to save $1,000. Figuring on the high-end results in needing to save $76.92 each week.
You have time to build the savings since the home won’t immediately need repairs unless you purchase a fixer-upper. Most homeowners’ first maintenance task amounts to changing the filter in the air conditioner, a part that costs about $25.
Prioritizing Maintenance
Everything eventually wears out, from roofs to HVAC systems. Depending on your roof type, it could last between 15 and 50 years. If you purchase a home with an older roof, expect to replace it at 15 years of age. Research and plan for these wear and tear items when you purchase your home, so you can save the $8,000 Roofers Guild says a standard roof replacement costs.
Also, research your options for a replacement. For example, will you choose an asphalt roof or one made of copper, metal, slate, or wood shakes? According to Webinar Care, metal roofs now top 14% of homes. Metal roofs last up to 50 years, so installing one can ensure you never need to replace your roof again.
Appliances need replacing about every 15 years, except for dishwashers. Those wear out in their ninth year of life because they experience near-daily use. Replacing an item at the appropriate age, rather than when it breaks down, saves you money in repair bills on top of replacement costs. Shop sales and set up online alerts to let you know when an item you need goes on special.
Make a Dream Projects List
If you had all the money you could possibly need, how would you change your home? Make a list of what you want to change, including big-ticket items like a swimming pool and a fully renovated kitchen with all new appliances. Research their costs and build a budget. For example, the average kitchen renovation costs $14,000, according to Comfy Living.
Once you’ve priced each project, prioritize the list. Place items that affect structural integrity first. A safe home tops having a spiffy home. Next, prioritize the utilitarian repairs and projects, like putting in low-flow toilets. These projects save you money in the long run.
The lowest priority items consist of luxury items like a swimming pool, hot tub, new deck, etc. Although these items raise the ultimate value of your home, they pale in importance to structural concerns, plumbing, and electrical needs.
Budgeting Basics
The fact remains that you can fund anything you want to do with patience and work. Earn money, save it each week, and complete one project at a time, addressing the highest priorities first. This project process eventually results in you owning your dream home.