How Much Should I Put in Savings for Home Maintenance?

Becoming a homeowner is one of your most significant accomplishments in life. Owning property is full of possibilities, but it’s also a whirlwind of documents and financial obstacles. Between taking care of your mortgage and closing costs, you may have forgotten to budget for emergency home repairs.  

Read on to learn how much you should put into your savings account for home maintenance.

Factors to Consider

It isn’t straightforward to predict the type of maintenance your home will require, the associated costs, and the exact month you will need to make said repairs. Although researching average homeowner costs is helpful, you should only use these statistics as a starting point for your yearly maintenance budget. 

Learn more about the importance of a home maintenance fund.

Why Should I Start a Home Maintenance Fund?

No one wants to deal with a mold infestation or a broken toilet. Budgeting for surprise home repairs helps ensure you have sufficient money to keep your home functional; most importantly, this will help keep your family safe in case of an emergency. 

How Much Should I Budget for Surprise Repairs?

Here are a few rules of thumb to consider when setting up a budget:

• One Percent Rule: Set aside at least one percent of your property’s value each year for repairs. For instance, if your home is worth $360,000, you should stash away $3,600 per year, or $300 a month. 

• Ten Percent Rule: Alternately, you can save ten percent of the total cost of your property taxes and insurance and mortgage payments. For example, if you make a combined tax, insurance, and mortgage payment of $3,000 per month, you should set aside an additional $300 for home maintenance. 

• Set Aside a Fixed Amount: At a minimum, we recommend you set aside $200 every month in your savings account. Even setting aside $100 each month can help reduce your stress when disaster strikes. 
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Where Should I Save Money for Emergency Home Maintenance? 

The best place to save money for home maintenance is in a fluid savings account. In case of emergency, you will need to be able to take out your cash fast and without a hassle. Avoid tying your maintenance budget with long-term bonds, and consider opting for a Federal Deposit Insurance Corporation (FDIC) to maximize your interest rates. When you open an FDIC account, your deposits will be federally protected against bank failure and fraud. 

Furthermore, you will be able to withdraw money when an emergency occurs quickly. Keeping your maintenance fund in a separate account can help you save money for repairs by making it harder to dip into it for unrelated expenses. 

Home or Business Emergency? Contact Hudson Douglas Public Adjusters

Homeownership is a huge responsibility with equally huge expenses. If your home or business has experienced a fire, smoke, or water damage, you need your insurance claim quickly resolved. At Hudson Douglas Public Adjusters, we represent you, not your insurance company. Call us today for a free claim review.