If you own a car, you know there’s more to the cost-of-ownership than just
finance payments and gas. You also need to budget for maintenance and
repairs. If your car is older, those costs are going to be higher. That’s just
The same is true of your home. It’s wise to budget for anticipated repairs
and maintenance. Otherwise, you might be caught by surprise when you
find that your furnace stops working and needs to be replaced. That can
easily be a four-figure expense.
Experts recommend that you set aside 1% of the value of your home for
repairs and maintenance. For a $500,000 property, for example, that would
be $5,000. That is, of course, merely a rule of thumb. If your home is older,
you may need to budget more.
Another recommended method is to budget $1 a square foot. If you have a
2,500 square foot home, that would be a budget of $2,500. Again, that
number would need to be higher for older properties.
When budgeting, consider things that are getting old and will likely need to
be replaced within the next three years. Examples include roof shingles,
furnace, A/C unit, deck, fence, plumbing, and windows. Depending on the
size and model, a new A/C unit will cost at least $5,000. Anticipating that
expense will help you plan accordingly and avoid the shock of an
unpleasant and costly surprise.
Keep in mind that budgeting $2,000 for repairs and maintenance doesn’t
mean you’ll actually spend that money this year. But, if needed, the budget
will be there, and that’s peace-of-mind.