How to Save for and Afford Home Repairs

Man repairing an air conditioner

Too many prospective homeowners look at the price of the home and the monthly mortgage payment to determine how much house they can afford. But other expenses need to be considered, including property taxes, home maintenance, and repairs. Property taxes will vary depending on your location, but you should budget one to four percent of your home’s value each year for home maintenance and repairs. For a house that costs $400,000, you should set aside $4,000 to $16,000 a year for repairs and improvements. Ouch! You can see how neglecting to consider this amount when determining how much house you should buy can make being able to afford home repairs difficult. However, there are ways you can creatively save.

How to Save for and Afford Home Repairs

Last year, we bought a house that was 23 years old. While it was in reasonably good shape, there were some problems we had to address, such as basement leaks when it rained heavily (and it rained heavily frequently) and windows whose seals had broken or even had holes in them! This is how we are handling repairs.

Remind Ourselves the Repair Will Only Get More Expensive the Longer We Wait

We learned at our former house that repairing early is almost always cheaper than repairing later because the problem usually worsens. For instance, our bathtub leaked, and we didn’t have the money to fix it immediately. Our lack of action eventually led to mold in each of the bathrooms next to the bathroom. Making repairs on walls that were moldier was much more expensive than if we had just taken care of the initial leak. Lesson learned, and we will not make that mistake again with the home we live in now.

Do the Repairs You Can

If you can make minor repairs and improvements on your own, learning how is worthwhile. For instance, we had a plugged toilet. My husband bought a drain snake and unstopped the toilet without calling a plumber.

Likewise, this year, our deck needed restaining, so we learned how to do it and did it ourselves. It took many hours of our time one weekend, but we saved significant money.

At our old house, I learned how to strip kitchen cabinets and paint them. When we wanted to refresh our kitchen, I took our cabinets that were losing the stain and painted them white. They looked much better!

Make a List of Priorities

When we moved into this house, we made a laundry list of all the repairs and upgrades we would like to make, and then we prioritized.

For instance, we have five large, half-dead pine trees in our backyard. They drop pine cones that we must rake up before we mow. I despise these trees. Someday, they will be gone, but instead, we’ve prioritized fixing the basement leaks and replacing the windows with broken seals in the two bedrooms that get the brunt of the winter wind and cold.

We don’t have money to repair everything at once, so we must fix the most pressing issues that have the potential to cause the most damage if they’re not done immediately. The pine trees will have to wait a few years.

Alternate Expensive Years

Man on the roof replacing shingles

When we were home shopping, one homeowner listed all the repairs and home improvements she had made over the last 15 years. We noticed she had expensive years where she made significant improvements, like replacing the roof, followed by years where she did minor repairs. We liked that pattern.

In the first year of owning our home, we spent approximately $10,000 fixing four leaks in the basement, replacing two bedroom windows, fixing the garage door, and replacing the washer and dryer. This was our expensive year.

Next year, we plan to make minor improvements, such as painting the bathroom and hallway, which will allow us to save money for year three when we’ll make more expensive improvements again. Alternating repair/improvement years help ease the financial burden of home ownership.

Have a Home Repair Sinking Fund

Within your monthly budget, have a home repair sinking fund. We set aside 1.8 percent of our home’s value for repairs and maintenance. I know this number should be higher, so when my husband gets his next raise, we plan to increase this sinking fund to at least 2.1 percent of the house’s value.

Even though we can’t save as much as we would like, having the money available when an urgent house need arises is reassuring.

Take Advantage of 0% Interest

If you have an expensive home repair, such as roof replacement, that you can’t pay cash for, ask the company you’re hiring if they have a payment plan. If they offer zero percent interest for a specific time, take advantage of that, but arrange your budget so you can pay off the loan before the zero percent interest ends.

Another option is to pay via a zero-percent interest credit card, but you need to be especially careful with this option to pay it off before the introductory period ends. You don’t want to end up with a large balance from your home repair that you must pay 14 to 18 percent or more interest on monthly.

Work Overtime

In addition, you can work overtime or get a side hustle to pay for home repairs. You likely wouldn’t want to do this for routine maintenance, but the extra effort can help you cover major repairs that cost more than ten thousand dollars.

Final Thoughts

When looking for a prospective home, consider how old the house is. Newer houses may only require one percent of the home’s value yearly for repairs and maintenance. Homes twenty to thirty years old may require two to three percent of the home’s value, and houses older than that may require four percent. Ensure you can set that money aside monthly to afford home repairs.

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