Many people think in order to own a home, they need to only budget for the down payment, taxes, and insurance, and they’re done with major expenses.
However, the costs of homeownership don't stop with the expenses necessary to purchase the home.
Just as a vehicle requires regular maintenance, so does a home.
Items we use on a regular basis, such as the washer and dryer, kitchen appliances, and even the HVAC system, experience wear and tear, and over time, parts need to be cleaned and eventually replaced.
There are also aspects of maintaining a home that endure wear and tear but aren't something you might consider “using” on a daily basis, such as the roof and siding.
Yet, you don't want to overlook any of these aspects of the house when buying a home.
The costs of maintaining a home on a regular basis by far outweigh what it might cost to replace everything on a more frequent basis. Or worse when damage comes from systems not properly cared for.
But when appliances, roofs, siding, flooring, and other major big-ticket items are so expensive, how does one stay on top of these costs without breaking the bank?
A Three-Step Budget Process
The answer is actually a very simple three-step process:
- Make a list of all the major items in your home that may need repair or replacement at any given time.
- List them in order of average life expectancy and create a plan to inspect and repair as needed.
- Save money into a special “homeownership” bank account so you have funds at hand for any emergencies. Or to cover replacing these items on your schedule, without surprises.
What are a Home's Big Ticket Items?
While they vary for everyone, this is a list of the most common items in a home that'll need repair or replacement at some point in time.
Average life expectancy: 20-25 years
The roof is not only in use every minute of every day, but it also bears the brunt of every weather event and every temperature change. Roofs are designed to be sturdy and last a good while, but nothing lasts forever.
House Paint: Interior
Average life expectancy: 5-10 years
Inside a home, paint in high traffic areas collects handprints, dirt, scuff marks, nicks, and scratches. Some of those marks can be washed off, but there are times when only a full coat of fresh new paint will do.
House Paint: Exterior
Average life expectancy: 4-15 years
The extreme range for when to paint the exterior of a home is because there are many factors influencing the life of your paint. Do you live in an area with a lot of salt water or high winds? If so, you might need to paint more often.
Average life expectancy for carpet: 8-10 years
Linoleum: 25 years
Hardwood floors: Refinish every 20 years or so
Keeping floors looking great is a challenge. Regardless of the type of flooring you have – hardwood, laminate, tile, or carpet – your floors will experience wear and tear on a daily basis. Scuff marks and scratches are inevitable. Dirt gets ground into flooring more than you may even realize.
Refrigerator: 15-30 years
Stovetop and oven: 20 years
Dishwasher: 7-10 years
Kitchen appliances have a pretty wide range when it comes to lifespan. This is because the use of appliances can vary widely, but an average of a ten-year lifespan for a kitchen appliance is about right on the mark. At about that point, anything still running well is a bonus.
Average life expectancy: 10-15 years
This combo probably gets the most use in any home. It’s especially important to keep these two appliances running well, because should the washing machine fail, you risk major water damage to your home. Should the dryer fail, you risk a house fire.
Average life expectancy: 15-25 years
The heating, ventilation, and air conditioning system in any home is going to be a workhorse, even more so if you live in a climate with extreme fluctuations in temperature.
This is one aspect of homeownership where a non-working system could result in serious health concerns for the homeowners. Extreme heat or cold can be deadly, and those with asthma or other respiratory conditions could depend on that conditioned air.
Bathroom Components such as vanity, tub, tile
Average life expectancy: Variable
When it comes to bathroom components such as the tub, toilet, surround, vanity, and fixtures, replacing them is highly subjective. While the different components could last 30 years or more, styles become outdated and you may wish to update pieces for cosmetic reasons.
Windows can last thirty years or longer, though the components such as caulk and trim may not last as long.
While a fireplace should last for the lifetime of your home, the chimney will require routine cleaning and inspection. A gas fireplace insert may last closer to 15-25 years and require more upkeep.
Façade, including shutters
Average life expectancy: 20 years for wood shutters; 60 years for vinyl siding
Materials designed to last outdoors are typically built to last a long time, but nothing is truly indestructible.
Average life expectancy: 15-20 years, though can vary
Hardscaping, such as pavers and patios, should last a few decades, while organic components such as mulch and plants, or items not hard-installed such as gravel walkways, will need replacing far sooner. Wood fencing, like most exterior wood, should last about 20 years.
Hot Water Heater
Average life expectancy: 8-12 years
This is an item not to be underestimated because when it stops functioning, the consequences could be far worse than simply not having hot water. You could end up with serious water damage in your home. The key is not to get to the point where the heater actually fails. More on that below.
Now that you have an idea of how long things should last, what should you do about it?
The real key to maintaining a home is to plan ahead. Knowing big expenses may happen but arming yourself with a plan for caring for them can be the key to having peace of mind.
Make yourself an expert on your home. Don’t worry, no professional training is needed. After all, you are the person who knows your home the best, and you are best able to tell when things aren’t working as they should.
Once a year, or even once a season, do a walkabout, checklist in hand.
On your checklist, include the items listed above plus anything else you might like to keep an eye on.
Include the date of purchase, date of expected replacement, and leave space for any notes you might have as you go. Here is an example of how it could look:
Every year, add to or update your notes. This check will take you maybe an hour, tops, and likely even less once you have done this the first time.
You can track everything right on your tablet or go old school and fill out a chart you keep in a binder. Bonus: these notes will be great to hand off to the next homeowner should you decide to sell the home.
Hire Professionals for Regular Inspections
Certain items require professional care. An annual inspection of your HVAC system, for example, is where you will want to call in a professional who is trained to inspect the electrical and plumbing components of this system.
An annual inspection is something you could potentially negotiate including in your service contract if you buy a new system.
Such an inspection will help you know what types of parts might need to be replaced and when, and will keep existing parts working at their highest efficiency, thus keeping expensive repairs to a minimum.
Wash/Clean on a Routine Basis
This is perhaps the easiest way to stay on top of home maintenance costs. It costs little more than some elbow grease and a few basic cleaning supplies.
At most, you might wish to consider renting a power washer once a year to deep clean the siding and patio. Other than that, wiping down the walls, and deep cleaning the bathroom fixtures, etc., provides a chance for you to not only keep things in good working order but will identify problems much quicker. Then you'll be able to address them in a cost-effective manner.
Schedule Replacing Big-ticket Items
In addition to your checklist, map out a schedule for when the expensive items are estimated to need replacement.
There’s no rule saying you have to replace things at those times, and many people get much more out of systems and components than the recommended lifespan. But, having a plan laid out will offer the peace of mind of knowing what might be coming, so you can budget and plan ahead.
Create a Sinking Fund
Many banks will allow you to create multiple savings accounts earmarked for different things. Or, you could start an account at a new bank and take advantage of new customer incentives (bonus!).
Either way, sock away money from every paycheck into a sinking fund for maintaining your house.
The key is to put the money somewhere where you can access it in a hurry if you need it for an emergency repair, but where it is not so accessible you'll use it for other things.
A savings account separate from your regular checking or savings account is the perfect solution.
How Much Should I Save?
A popular rule of thumb is to anticipate spending one percent of the purchase price of your home in maintenance costs per year.
So, if you paid $200,000 for your home, consider you'll likely spend $2000 per year to maintain it. That works out to $167 a month, or $77 a paycheck if you are paid biweekly. When broken down, it doesn’t seem so bad, does it?
This money is what you will draw from to cover those big-ticket items when it’s time. It’s always cheaper and less stressful to replace an appliance or another home component on your schedule than to wait until something breaks and potentially causes damage.
Consider this: The average cost of a new hot water heater is $500. Is it cheaper to spend $500 to buy the hot water heater and pay to have it professionally installed, or to eke out another year, maybe two, of use but then risk the water damage that may come when the hot water heater fails?
Consider a Warranty Plan
Home warranty plans have their pros and cons, and it’s important to consider both.
The biggest upside is that for a minimal amount of money upfront, you have the peace of mind of knowing should any major household items break, you may have them repaired or replaced for the cost of a deductible.
The downside is that the warranty company will likely push to repair as much as possible when sometimes it’s more economical for you to simply replace an item.
You're also at the mercy of the repair companies the warranty company chooses, which could be good or bad, depending on if you have preferences for service providers.
Consider Finance Plans
Larger service providers, such as HVAC companies or flooring installers, offer their own financing. These deals can be great, as long as you are comfortable with the terms.
While terms may vary, typically, you can borrow 80-100% of the purchase price at 0% interest for one year. The benefit is you don’t need much cash upfront, and you have a year to pay off the expense.
The catch is a high rate of interest accrues throughout the year.
If the bill is paid in full within 12 months, you don’t pay a penny of the interest. The minute you hit month 13, though, all of the interest over the past year is added to your remaining balance, which then begins accruing more interest until you finish paying the bill.
This is a good option for anyone disciplined at paying bills on time. If you know that isn’t you, though, this might not be the best way to go.
Replace the Little Things to Extend the Life of the Big Things
Replacing the filter in your HVAC system is one of the cheapest, easiest, most important and effective things you can do to maintain your home. Do not overlook doing this.
Keep your vacuum cleaner in good working order, and use it regularly to keep your floors in great shape.
Use your dishwasher only when full, so you don’t wear parts out as fast by running it two or three times as much as is needed.
Replace caulk around windows (or hire someone to replace caulk around windows) once every few years or when you can feel a draft. This is much cheaper than replacing a set of windows from scratch and can extend the life of your windows.
Final Thoughts on Budgeting For Major House Expenses
Above all remember budgeting for big-ticket home maintenance items need not be difficult or stressful. The keys are:
- Embrace the fact that expensive things will have to be replaced at some point
- Know that putting off care and replacement of them will cost you more in the long run, in terms of money, safety, and peace of mind
- A little prevention goes a long way in terms of getting the most out of your home
- Annual visual inspection won’t take a lot of time but will offer great dividends in helping you plan ahead
- Write a short-term cleaning and maintenance plan, and a long-term big-ticket item replacement plan. Knowing what might be coming and planning ahead for it will keep you from being blindsided by large expenses.
- Put a regular amount of money aside to go towards house maintenance. You won’t need to buy a big-ticket item every year so the 1% you save will add up and allow you the flexibility to make wise purchases when you need to.
Lastly, remember to enjoy your home. You worked hard to be able to buy it.
Every penny you put into maintaining your home is a penny toward protecting your peace of mind.
With a sound plan and knowledge of what might be coming down the road, you will be ready for anything.
Article written by:
Marie Morganelli, a freelance content writer who writes regularly about finance, health and wellness, travel, and higher education. She also provides blog content for a number of small and medium-sized businesses.