Planning and Budgeting for Home Repairs and Improvements
We all know that planning and goal setting are two very important parts of anything we do in life. The same is even more important when it comes to home maintenance, upgrades, or home repairs that need to be done now, or not too far into the future. After all, when the central ac compressor stops working on a 90 degree day, the last thing we want to deal with is how to pay $1,250 (average cost) to get it repaired today!
In this Costimate.com Homeowners Guide, I want to talk about the importance of budgeting and planning as it related to being a homeowner. According to LifeHacker, you should budget at least 4% of your newer homes value annually for maintenance and repairs, more, up to 10% if it’s an older home. As a homeowner myself, of a ranch-style house that was built in the 70’s, I can tell you that we spend about 2-3% of our homes value every year on maintenance, repair and updates. Without fail, we spend at least $3500 every year on the following things.
- Lawncare, re-seeding, and landscaping.
- New plants, annual flowers, etc.
- Freshening up paint both inside and out.
- Minor Repairs like New Faucets, HVAC Filters, HVAC Maintenance, etc.
- Gutter cleaning, chimney cleaning, appliance repairs.
These are the smaller things you’ll spend money on around your house, and although you don’t really have to budget for running to Lowes and buying some fresh plants for your landscaping, it does help to have a savings account set aside just for home maintenance and repair.
So, how do you plan for the larger home repair expenses that are sure to come as well? By setting an additional 3-5% of the home value aside in a special savings account for major repairs that are sure to happen when you can least expect, or afford it. A few major expenses nobody ever plans on, but must be made quickly are:
- Water heater replacement – $800 – $2100
- Central AC or heating system replacement – $3200 – $7500
- Roof or shingles – $3500 – $7000
- New refrigerator – $850 – $2000
In general, if you are a homeowner, have lived in your hyouse for more than 5 years and never had to spend money on these larger expenses, get ready… it will happen sooner than later.
What if You Haven’t Saved for Repairs?
Fortunately, or not… depending on how you see it, just about every home service company has a financing offer to help you get through a major repair project. If you don’t really like the offer they have, shop around and look until you do. Credit unions and banks often offer a zero-interest loan for 6-12 months to help you pay for major home repairs. For HVAC purchases, most of the leading brands also offer this interest free financing through the local companies that sell their products. Bottom line… shop around and compare until you get the best rate or offer that works for your own payment plan.