Every home will eventually need repairs. Discover how to budget for home maintenance and what to do if you’re short on cash when a repair is needed.

When buying a home, one thing new homeowners often overlook is the the cost of maintenance. The simple fact is that all of a home’s system and appliances will need to be replaced at some point. For example, a dryer can last up to 13 years, while a roof may have a 30- or sometimes 50-year life expectancy. Rather than being surprised by such expenses, it’s wise to plan for them. Here’s how to budget for home maintenance.

How much to save

Even if your home is brand new, there will be maintenance expenses. A general guideline is to budget an amount equal to 1% to the purchase price. On a $275,000 home, this would $2,750.

You may want to consider setting aside more, perhaps up to 3% of your home’s value. A larger maintenance fund makes sense when you have an older home that hasn’t been updated or if there are existing issues you know must be addressed sooner rather than later.

Consider insurance deductibles

If you have to make a claim on your homeowner’s insurance, there will almost always be a deductible. Some folks make sure they can cover a deductible with savings they keep in their emergency fund or a home maintenance savings. Either way is fine; the important thing is to be financially prepared.

Finding the funds

The fastest way to set up a home maintenance savings account is by allocating money that had not been designated for other purposes. However, many people need to build up their maintenance savings over time. Start a monthly savings plan by dividing your estimated annual expenses by 12. Using our example from above, if your target is $2,750 you’ll need to set aside about $230 each month.

If you receive a tax refund or bonus, consider using this money for your maintenance savings account.

Consumers’ tips for building up an emergency fund without feeling deprived can also be used to help grow your home maintenance fund.

Always build the fund

It may be tempting to stop saving once you hit your annual target. However, it’s wise to continue saving. Consider that a new roof could cost $12,000. If you continue to build your savings over the years you’re more likely to be prepared for bigger repairs.

What if expenses come up and you don’t have enough saved?

Even the best laid plans can sometimes fall short. If you don’t have enough cash on hand, you could use the equity in your home to borrow what you need. With a Consumers home equity loan or home equity line of credit (HELOC), you get access to cash when you need it at a great, competitive rate.

Consumers helps more than 2,000 members finance land, first and second homes, and home improvement projects each year. We’d love to help you with a mortgage or home equity line of credit; contact us online or call us at 800-991-2221.