How Much Should You Save for Home Maintenance and Repairs?

Don't get caught off-guard when home repairs crop up.

Maintaining your home and repairing it when it's damaged is crucial to keeping your property value steady. Deferred maintenance or unrepaired problems can compromise the integrity of your house and lead to more expensive problems down the line. They could also make it hard to sell for enough to pay off your mortgage if you need to move. And they could make your house less livable.

Unfortunately, properly maintaining a property can be expensive. And if you don't budget for this as a part of your routine expenses of home ownership, you could have to tap your emergency fund or, worse, have to charge expensive repairs on your credit card if something goes wrong.

So how much should you save for home maintenance and repairs?

Budgeting this much for home upkeep could help you prevent financial disaster

As a general rule, it is good to save anywhere from 1% to 3% of your home's purchase price every year to cover home maintenance and repairs. You may want to aim for the upper end of this scale if you have an older home likely to need a lot of system upgrades, or if you have a home with high-end appliances and fixtures that could be expensive to maintain or repair.

If you decide your home is likely to need a medium amount of maintenance and repair, you may want to opt for 2%. If you purchased the house for $400,000, you would aim to save $8,000 per year. You could divide this amount up to see how much to put aside each month, then build a deposit of about $667 into your monthly budget. Each month, you can transfer this amount to a high-yield savings account.

You may not actually spend $8,000 per year every year maintaining your home. In some years, you could end up spending just a few hundred dollars. But as any homeowner can tell you, it is inevitable that at some point, something will need a big and expensive fix.

For example, your home may need a new roof, which could cost tens of thousands of dollars. Or expensive fixes such as a new air conditioner or a major plumbing problem could arise. When these big expenses come up, you can tap into the money in your maintenance-and-repair account without having to worry about borrowing or finding the money elsewhere.

Having money in your maintenance fund also makes it easier to keep up with routine tasks that help you prevent expensive problems later. You won't have to put off minor fixes or maintenance tasks because you don't have the cash.

Ideally, start saving for maintenance and repairs right away when you become a homeowner so you are financially ready when an issue comes up -- and so you never have to put off maintenance out of financial concerns.