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How much should you budget for home repairs?

home repair budget


Homeownership offers buyers several benefits from a personal and financial standpoint. The pride in owning and caring for real estate inspires many home buyers. Homeownership also provides people with the opportunity to build equity and gives them the freedom to make almost any changes they wish — no need to ask permission from a landlord. Homeowners can even take advantage of tax benefits.

However, as part of owning a new home, owners must make sure they budget enough for home repairs and maintenance. Some home maintenance and repairs may go beyond landscaping and require careful consideration of personal finances. That’s why having a maintenance fund can help considerably. Taking care of your home with regular maintenance and when unexpected repairs pop up will help you avoid larger expenses later on and keep up the value of your home. 

Since maintenance and home repair costs are not always consistent, though, many homeowners find themselves wondering how much they should put aside to cover needed work. Here’s what you should know about budgeting annual home maintenance.


3 ways to budget for home maintenance and repairs

If you’re interested in a maintenance budget for your home repairs, a few strategies can help you determine how much money to set aside to account for household expenses and the cost of upkeep. Designating a specific fund for home maintenance and repairs will ensure that you have the funds ready for home repairs. Unfortunately, failing to set aside funds for home repairs can result in additional stress and problems, for example, when your HVAC system breaks in the winter and you are scrambling to find the money needed to repair it. 

If you’ve decided to start budgeting for home maintenance and repairs, you’ll want to place that money in a savings account as an emergency fund. This will make it easily accessible and allow it to earn a small amount of interest as you wait until you need it.

The 1% rule

The 1% rule calls for homeowners to set aside 1% of their home’s value for annual maintenance and repairs. Many people will use the purchase price from when they bought their home to track the value of the home. This rule provides a clear, easy-to-follow calculation for homeowners to use for budgeting purposes. For example, if your home is worth $336,000, you’d multiply this value by 1%, which will give you $3,360. This is the amount you will want to set aside over the course of the year. Dividing this amount by 12 gives you a monthly budget item of $280 to set aside. 

This calculation appeals to many homeowners due to its quick, simple nature. Unfortunately, it does have some key drawbacks to note:

  • The rule does not take into account other factors, such as the age of the home or the age of appliances in the home.
  • The rule does not take into account that the same home can have different values in different geographical areas.
  • The rule doesn’t take into account factors that could artificially inflate or deflate the purchase price of the home, such as the quality of the local school district or the walkability of the local neighborhood. Although these factors impact price, they do not impact the maintenance needs of the home. 

The square foot rule

According to the square foot rule, people should use the total square footage of their home to budget for major repairs. People should plan on saving $1 per square foot within their home. This calculation scales accurately depending on the size of the home and is not subject to unrelated external factors, such as the location of the house or housing bubbles that cause dramatic increases in market value.

This similarly simple calculation involves multiplying $1 by the square footage of the home. If your house is 2,400 square feet, then this rule calls for a budget of $2,400 in annual costs to manage home repair costs. On a monthly basis, this equals $200 to put away.

While this estimation helps provide guidelines for homeowners, it does not show the complete picture. For example, it doesn’t take into account factors like the age of the house or its appliances, which could result in some budgeting struggles. It also doesn’t have any way of adjusting savings depending on increases in price or inflation for materials used.

Set aside a predetermined amount

Rather than regularly running calculations, some homeowners prefer to set aside a predetermined amount based on their personal budget. People appreciate the ability to earmark funds based on what they can actually afford. For example, some people might decide they want to set aside $300 from each paycheck for home maintenance and repairs.

This method provides owners with the most control over the amount added to their maintenance and repair fund. However, it can also be easy for people to start to underestimate how much they need. This can quickly lead to financial problems later on where people do not have the funds to address their needs.


What impacts the cost of home repairs and maintenance?

Homeowners should note that a variety of factors can influence how much money should be set aside for home maintenance repairs. Consider the following questions:

  • How old is your home? This impacts the home’s built-in systems and normal wear and tear on nearly everything in the home. A newer home will have fewer repairs, on average, than older homes.
  • Where is the home located? Location can impact the cost of labor and parts for maintenance and repairs.
  • The average age of appliances in the home. Older appliances will need to be replaced soon. 
  • How does your family use the home? A single person or a couple without kids who leave the house every day to go to work may find that their house remains in better shape than a family with several kids who love to climb on everything.
  • What is your local weather? Severe weather, whether thunderstorms, hurricanes or blizzards, can quickly cause additional wear and tear on the home. This is particularly true for outdoor components, such as the roof and patio.
  • What are your plans for future renovations? Future renovations might end up solving some of the problems that you already intend to fix. Repairs and remodeling can be managed together during the process.
  • Do you have a home warranty? A home warranty from a reputable home warranty company like Cinch Home Services can help homeowners manage their expenses related to home maintenance and repairs. With the right coverage, you can protect your budget from expensive repair and replacement bills.


What items should I include on my home maintenance list?

When considering how much to budget for home repairs, you want to make sure you closely follow the age and performance of key home systems. Certain built-in home systems, such as the HVAC system, play a critical role in the health and comfort of those in the home. If it stops working, it can quickly make the household miserable. The same goes for major home appliances. It’s important that your fridge continues working so that you can store food properly.

Keep an eye on these important systems and appliances, noting their maintenance schedule, repairs you have done in the past, and their intended life span. This will help you anticipate any needed repairs or maintenance.

Some built-in systems you will want to keep an eye on include:

  • The heating, ventilation and air conditioning (HVAC) system ensures you stay warm in the winter and cool in the summer.
  • The plumbing system also needs regular maintenance and care for the hygiene and health of everyone in the home. For example, if your water heater breaks, you will definitely be dipping into your emergency fund to stay comfortable in your home. 
  • The electrical system powers your appliances throughout the home.
  • The roof protects the entire interior of the home, and small leaks can quickly cause water damage after a storm. Know the age of the roof and when you will likely need a new roof. Making sure you maintain the gutters also plays an important role in the life of the roof.

You also want to consider the importance of your major appliances. Regularly monitor and check your:

  • Washing machine and dryer, as the loss of these machines can greatly impact your comfort.
  • Your oven, microwave and refrigerator. If these appliances malfunction, it becomes hard to prepare food and keep it safe to eat.
  • Appliances that add other conveniences to your daily life, such as the garbage disposal and range hood. Proper maintenance can also help you extend the lifetime of these modern conveniences.


Be proactive about home maintenance costs through a home warranty with Cinch

When it comes to protecting your home and budgeting for maintenance and repair, securing a home warranty can provide you with peace of mind. With a home warranty from Cinch, you don’t have to worry about unexpected expenses. We can help find the right coverage for you at a price that works for your budget.

Our home warranty plans cover a variety of built-in systems and major appliances throughout the home, such as heating and cooling systems, the electrical system, the plumbing system and appliances like the washer and dryers. And when you make a service request, we’ll send out a vetted service professional to help diagnose and remedy the problem.

To learn more about getting a home warranty from Cinch, request a free quote today. It has never been easier to give your home the protection it deserves.


Budgeting for home maintenance makes it significantly easier to manage sudden expenses. Here’s what to know.