Money Matters: Budgeting for Home Maintenance
FRANKLIN LIVING SEPTEMBER-OCTOBER 2023
Home improvements can be some of the most exciting projects. Home repairs, on the other hand, can be some of the most stressful. Home “improvements” are typically planned for and dreamed about, while home “repairs” usually means something has gone wrong.
Homeowners spend about $1,105 per year on maintenance, with emergency repairs averaging around $1,206. Some of the most significant expenses fall under the following five categories:
• Full home rewiring: $4,000 or more
• New HVAC units: $2,500 to start
• Roof replacement: $5,000 plus
• Foundation repairs: $10,000-30,000
• Plumbing: $2,000 for serious issues
With all of that information in mind, how do we financially plan for these sort of things?
While we can’t predict when disaster might strike, we can be proactive in our household budgeting to allow for home maintenance. Some key considerations include the age of your home, weather conditions and square footage.
The age of the home is important because depending on when it was built, eventually some things will need to be replaced or repaired. These items could include old wiring and plumbing, lack of insulation or problems with heating or antiquated chimneys and fireplaces.
Weather conditions matter if your home is exposed to extreme cold, high winds and heavy rains. Although extreme cold and snow don’t typically affect us here in north Alabama, those heavy rains, wind and tornadoes are definite considerations.
Square footage matters because when budgeting for repairs, the more space you have, the more space you will likely have in need of repairs at some point.
A general rule of thumb is set aside 1 percent of the purchase price or value of your home for repairs. So, if you have $150,000 home, you should set aside around $1,500 annually – hopefully less, if your home is newer, and you should likely plan for more if you have an older home or a home that has been battered by weather.
The most important financial rule in home repair and improvements is to set aside more than you anticipate spending. If you come out spending less, great! But cushioning this part of your budget can be critical when the unexpected happens.
Emily Mays is vice president/chief administrative officer at Community Spirit Bank in Red Bay, working in finance for 15 years. She is an enthusiastic social media marketer, financial literacy advocate and go-local supporter.