Purchasing a home is a big investment that needs to be executed well and carefully. However, unlike any other types of investment, it requires homeowners to continuously pay for home maintenance projects. Unforeseen damages and disasters are also the reasons why budgeting monthly expenses for maintenance is vital. Of course, the presence of service companies around can be such a big help. However, their presence will be useless if you fail to manage your monthly budget well.
This article discusses several things you need to know about managing your finance well for home maintenance projects. You may not be using the money every month, but just like what a wise man says, it is better to start doing it now than having to regret your poor life choices later. If you are currently having similar issues related to your home and financial state, below are several tips you can follow.
The One-Percent Rule
As a big investment, you need to do something to ensure that everything is going well, including your home maintenance and repair costs. Experts suggest that you keep at least one percent of the total house price when you bought it for care and repair purposes just in case something unexpected happens. Even if nothing happens until three months after the purchase, you still need to keep the money for the next care routine, such as plumbing, sewer, and roofing. In short, it is a kind of financial planning that you need to plan ahead of time, even before you buy the house. This way, you can prevent bad things from happening, including having no cash to cover the expenses.
Another way is to set up an automatic transfer to another bank account for maintenance purpose. For this method, you will need another bank account. This way is especially effective for those people who find it hard to spare money at the end of the month. Thus, the best way to do it is to automatically take the money right after payday. Note that the money collected will not be used every month. However, it will be a valuable source of budget whenever you need to make several home improvements.
The last thing you can do if none of the above methods work for you is to cut down on other expenses and start saving for home maintenance. It sounds extreme, indeed, but it is a better option rather than having to postpone the projects and wait until you have collected enough money.