If your house is less than 10 years old, saving 1 percent of the value per year is probably sufficient. Older homes have histories and the baggage of other people’s repairs, so they’re generally more likely to need repairs, and the repairs are going to be complex and more expensive. Large systems are less likely to fail, wiring is less likely to have been poorly rerouted by previous homeowners, and everything inside the walls is more likely to still be dry. Quite simply, new houses have lower average maintenance costs than older ones do.

However, a home’s age (as well as other factors) can affect how much you should save for repairs. Budgeting a little more than the average cost will allow you to prepare for bigger-ticket repairs and replacements that can crop up and throw off the 1 percent figure, such as roof replacement, HVAC system failures, or other high-cost repairs. This is because the average annual maintenance cost of a home works out to be just over 1 percent of its value. The general estimate of how much to budget for home maintenance is between 1 and 4 percent of this value per year. If your home is older, you can look at market values on local real estate websites, or look at your local tax assessor’s valuation and use that as a starting point. How much should you save each year for maintenance on your home? Well, how much did you pay for your new house? If it’s a recent purchase, you can use that number as the presumed value of your house-after all, you were willing to pay that much, and you weren’t outbid. The widely accepted rule of thumb is to set aside 1 to 4 percent of your home’s value every year for home maintenance, which includes both repair and replacement costs.

Saving money for anticipated costs can be hard, especially when you’ve just bought a new home, but even if you can’t save as much as you’d like right from the beginning, it’s important to start saving something for home maintenance as soon as you move in. Having money set aside can open up options for renovation if the opportunity presents itself. Also, it’s good to keep in mind that sometimes maintenance can result in “project creep,” where a repair becomes a replacement, and a replacement becomes a remodel or renovation. It makes much more sense to tuck away a little money on a regular basis so that you’re ready when the time comes, and don’t have to make tough decisions or skimp on repairs because you can’t afford them. Photo: Q: I’m so excited to be buying my first home, but I’ve watched friends run up huge credit card bills paying for expensive repairs-it seems like when you own a home, everything breaks down at once! How can I budget so that this kind of maintenance doesn’t eat up all my credit?Ī: You’re wise to be thinking about a home maintenance budget, because you’re right: One of the toughest parts of homeownership is that when it rains, it pours, and being unprepared can result in huge repair and replacement costs.

Gerneral household budget percentages