A Financial Handbook to Overcoming Home Repair Costs

Every homeowner must have a line in their budget for household repairs. Many people forget to include this line and must scramble to find the funds when a repair is needed. They struggle to meet their obligations and pay for the repairs but must do so to ensure the house remains safe and inhabitable. 

They may not know where to turn when they need help paying for repairs. Fortunately, they can obtain a loan to cover these costs. When doing so, they need to plan for the future so they don’t find themselves in a similar situation months or years later. 

Some men and women have a plan in place only to discover they didn’t set aside enough for the home repairs. They must take out a loan to cover costs above what they budgeted. The repairs must be completed to safeguard their investment. How can they better plan for future repair costs? How can they reduce these costs to remain within budget in the future? 

Common Household Problems

Many things can go wrong in a house. A person might have a plumbing issue, or their roof could need repairs. Appliances break down over time and must be replaced, and the home’s heating and cooling system must be maintained. The cost of repairs and maintenance depends on the item and the work that must be done. 

Estimating the Cost of Repairs

Estimating the cost of household repairs is challenging. Repairing a leaky faucet may only cost a few dollars if the homeowner can do the work. However, when a pipe bursts due to frigid temperatures, the homeowner may be looking at thousands of dollars in repairs. Replacing a major household system can also be costly, and fixing a broken lock on the front door won’t cost more than a few hundred dollars. Budgeting for these expenses is challenging because a person can never know what might break next. It never seems to be what they were expecting to fail. 

Establishing a Budget for Household Repairs

Every homeowner needs a savings account for household repairs. Financial experts recommend an emergency fund covering three to six months of living expenses. This fund may be accessed for household repairs, but that should be a last resort. It is best to have this emergency fund and a separate account for household maintenance and repairs.

Set aside one to four percent of the home’s value in a savings account explicitly reserved for household maintenance and repairs. If the funds are not used one year, allow them to roll over to the next year and continue adding to the account. Homeowners who do so rarely find they need to seek outside help when something goes wrong in the home. They can pull from this account and use funds from the emergency fund if the account cannot cover the entire repair bill. 

Prioritizing Funds

Homeowners may find they need to prioritize their home maintenance and repair funds. Always complete urgent repairs first. A leaky roof or foundation issue should be fixed before the dishwasher that no longer runs. The roof and foundation are essential structural components, while a dishwasher is more for convenience. Determine the long-term impact of each repair to see which tasks must be done first. 

Every homeowner must budget for household repairs. Knowing how much to set aside for this purpose will ensure the funds are available when needed. Homeowners who take this step never worry about caring for their homes. They have the funds necessary to protect their assets while safeguarding their investments. 

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