Earlier this spring, when the COVID-19 pandemic forced many people to stay at home, many homeowners found themselves with a lot of time to finally tackle the do-it-yourself projects or home repairs they maybe had been putting off.
According to a July Businesswire article, the latest U.S. Census Bureau report showed that home centers, hardware stores, garden centers and building materials suppliers realized a year-over-year sales increase of 22.6 percent, leading all retail categories except for online purchases.
“Even with people at home more than usual, we were surprised at just how many ways COVID-19 has impacted home improvement activity,” said Fred Miller, president of Consumer Specialists. “In terms of consumer attitudes and behavior, there has never been a single force that has so significantly shaped the home improvement market. Through this research, businesses involved in home improvement can better understand the current dynamic and make appropriate adjustments to success in this environment.”
But, how do you start budgeting for home repairs and maintenance? Check out these easy steps so you can create your own home repair budget and keep up with regular maintenance on your home.
Step 1: Determine how much you need to budget
To determine how much you should be saving for your budget, there are a few ways you can do it. One is to use the one percent rule, meaning you save 1% of your home’s value each year for repairs and maintenance. Some suggest saving as much as 3% of your home’s value to help cover the costs of larger repairs.
According to Ilyce Glink, author of “100 Questions Every First-Time Home Buyer Should Ask” and publisher of ThinkGlink.com, a personal finance and real estate educational website, another way to save is by “saving 10 percent of the total cost of your property taxes, mortgage and insurance payments,” Glink says. “This is probably the minimum amount you should plan for.”
Step 2: Make a list of repairs and prioritize
Create a list of the projects and repairs that need to get done and rank them accordingly. If you know you are going to have to replace your roof, get estimates and then start saving.
You may also want to consider a few factors when creating your list such as how old your home is, the types and cost of materials needed and even remodeling or renovating a room or your home in the future.
Step 3: Be prepared for emergencies
It is also important to also create a separate budget for emergency repairs, such as replacing the HVAC unit or weather damage to your home.
According to Home Advisor’s State of Home Spending Report, one in three homeowners reported having to complete an emergency home project, with an average cost of $1,206. It is homeowners living in areas that are known for having extreme weather events that reported the highest spending.
Glink recommends using an additional savings account for an emergency budget.
“You’re going to need to get at this cash quickly and easily when something happens,” Glink says. “Don’t tie it up into long-term bonds just because you think you’ll earn a little more in interest. Find an FDIC-insured bank account that pays the best rate of interest you can find.”
By following those three steps, any homeowner will be well-prepared for not only home repairs and maintenance but also emergency repairs.