The new year means a lot of good intentions, one of them probably being getting your budget in balance and having a handle on your finances. But when you’re a homeowner, you know that’s a tough act. Things happen—air conditioner goes on the fritz, water heater floods the basement. So how do you handle home maintenance and repair when it comes to your budget?
Your home, even if it’s brand new, will require some sort of repairs and maintenance visits at some point in the near future. Remodels will take a big chunk of money, as well large repairs. Large projects can cost tens of thousands of dollars and take a pretty long time to save for.
- Create a separate savings account for your home, this will make it easier to keep money specifically for your home.
- Set aside 1 to 3 percent of your home’s purchase price each year in that savings account (this can be done monthly or in one large chunk, whatever you’re comfortable with).
- Prioritize your home’s needs. Bigger projects require bigger budgets. One of your best friends in budgeting will be estimates, so be sure to get an estimate on what you need done in order to make sure you’re saving enough.
- Plan ahead, if you can. If you know your furnace is going to need replaced within the year, have a technician come do an estimate on a new one now, then save.
- New appliances should be conscious. Your new appliances can help you save money by being energy-efficient appliances rated by Energy Star.
- If it’s a minor job, considering doing it yourself.
- Considering credit cards? Try cutting your expenses and saving money first. Using a home equity loan or credit cards could leave you paying more, for a much longer time.
So what if you really do need a home equity loan? Only consider these for major upgrades or renovations. Work with a financial advisor, first, to determine if refinancing your mortgage, a home equity loan, or reallocating money is the better option. Take your time researching, planning, and discussing your home needs so you know what budget plan you can handle best.