Your home is most likely your biggest investment, and taking care of it is essential. Home repairs are a fact of life, and emergency repairs such as sewer line breaks, roof leaks, heating and air-conditioning issues are costly. In your financial planning, budget for the inevitable break downs in your home and save yourself time and stress when they occur.
How Much to Save
The general recommendation is to save 1% to 3% of the cost of your home per year. If you paid $250,000 for your home, that equals $2500 to $7500. You may not need the entire amount each year, but continue to save. One major roof repair or air-conditioning replacement exceeds that amount. According to ThinkGlink, a personal finance website, saving 10% of the monthly combined payment for your mortgage, insurance, and property taxes is another way to save. If your monthly payment totals $2000, then save $200 per month.
Ways to Save
If saving is not your strong point, financial planners advise that you to open a savings account linked to your checking account. Set up an automatic monthly transfer from checking to savings for your repair account. For further financial protection and freedom from worry about unexpected expenses, consider a home warranty. CostOwl estimates the replacement cost of a refrigerator at $800 to $3500, and repair rates at $65 to $85 per hour plus the cost of parts. Covering appliances and other major items with a home warranty, is a great way to reduce the risk of unexpected large expenses.
Ways to Prepare
If you have been in your home for a while, pay for a home inspection. While this will cost you on the front end, it makes you aware of potential future issues for which you can prepare. Perform routine maintenance on your heating and air conditioning units. Get your roof and gutters inspected annually. Take steps to make your appliances last longer.
No amount of preparation completely prevents home breakdowns. Take care of your home and appliances to prolong their life. Save for the inevitable home repairs, and purchase a home warranty to protect your budget from expensive home repair bills. Less worry about how to pay for unexpected expenses lets you and your family enjoy your home even more.