When it comes to repairing items throughout your home, you may be worried about their costs. Taking some money each month and setting it aside into a fund where you can have it ready for when repairs are needed is a great idea. Trying to figure out what amount you need to set aside for budgeting is something that can have you confused. Let’s take a look at how to determine how much you need to set aside.
The 1% Rule
One of the best methods for determining the budget size that you should set aside for your home repairs is using the one percent rule. This states that each year you should set aside an amount equal to one percent of the value of your home. For example, let’s say your home value is 300,000 dollars. You’ll want to set aside 3,000 dollars each year for ongoing maintenance of your home. This is a quick and easy method that you can use to set a goal for repair savings.
Age Is a Factor
When deciding on the right amount of money to budget for your home repairs, the age of your home is going to play a big role. If you have a home that is over 20 years old, it’s going to require more regular maintenance than a home that is newer. Also, when it comes to appliances such as fridges and air conditioners, older homes tend to have older equipment. This means they’ll need to be replaced sooner than a new home that has all new appliances. Setting aside slightly more money for older homes is advised so that you can be assured that you have the money on hand to pay for repairs and appliance upgrades.
The Square Footage Rule
This role tends to be more specific to your actual home as it’s based on the square footage of your home. The square footage rule states that you should set aside one dollar per square foot of your home. So, let’s say you have a 2,000 square foot home. You should be setting aside about 2,000 dollars per year for your maintenance expenses.
Being a homeowner comes along with many necessary responsibilities. Being able to fund the necessary repairs that come up is one of them. The above information should give you a good idea of how much you’ll need to set aside each year to ensure you have the funds necessary to fix your home.