After saving up thousands for a down payment, handling mortgage fees, and other closing costs, first-time homeowners are often shocked to learn that their costs do not end there. Already strapped for cash, home maintenance can create a whirlpool of debt and frustration. What do you do when you only have $50 to your name and the roof starts leaking?
When you rent, it is up to your landlord to take care of these types of mishaps as well as fix up the surrounding property. Making the change from renter to owner is often something that many do not consider in their budget, simply because they haven’t had to for so many years. This guide is here to help you make a solid financial plan for when upkeep needs done.
The first, and most important, thing you should do is build up a reserve. Open up a separate savings account specifically for home maintenance and try to set aside one to three percent of your home’s purchase price each year. If you home cost $100,000, then you would want to set aside $1,000 a year. You could do this in one large deposit or make it easier on yourself by spreading out the cost in monthly deposits.
You can help pad that savings account by reducing your utility bills through conserving energy. Minimizing gas and electricity costs can save you hundreds over the course of just a few months.
Assessing The Situation
If you know something is going to need to be replaced or repaired, get an estimate on how much that will cost and start saving for it. Most home repairs do not need to be taken care of immediately, which is good for your budget. Having the time to save up can take a load of stress off of your shoulders.
Small steps taken today can help avoid larger maintenance repairs in the future. For instance, finding automatic lawn sprinkler from a sprinkler system company can ensure your grass never dies and frees your time to deal with other home issues. Another example would be to invest in an updated gutter system to prevent leaks and water damage.
How handy are you with a set of tools? If you feel comfortable enough to take on the task of repairs and upkeep yourself, then you can save big instead of hiring someone to do the job for you. Fixing a leaky pipe or repairing a damaged fence isn’t always as complicated as many might think, and you always have helpful videos on YouTube to guide you through the process. Not every job is a DIY project, however.
Things like electrical work and sewage repair require experts. If you needed to replace your roofing, for instance, you might want to hire someone like https://www.southjerseyroofers.com/ to make sure it is done right instead of doing it yourself and creating an extra expense if it starts leaking as soon as the first rain starts pouring.
Don’t Rely On Your Credit Card
While it might seem like a good idea when in a pinch, creating debt is the opposite of building a stable budget. There are plenty of home equity loans and credit card companies out there, but try to cut expenses and save money first. Only needing to put $100 on your card instead of $1,500 makes it a lot easier to pay off once the work has been done.