How to Budget for Home Maintenance Fund?

16 May 2023
How to Budget for Home Maintenance Fund

It's possible that purchasing a house and lot Philippines will be the most thrilling experience of your life. It's a tornado of paperwork and financial obstacles, but it's also a whirlwind of potential.


One of the challenges that might get overlooked in the flurry of mortgage paperwork and closing expenses is setting aside money for unexpected house repairs.


Start saving now for unexpected home repairs by creating an emergency fund or a savings account. Find out how much you should put aside for house repairs, and how budgeting for unexpected repairs may help you stay within your budget, and make your life as a homeowner easier.



Why You Should Save for General Home Maintenance Budget?

If you put aside money each month in your budget for unforeseen home repairs, you can be certain that your house will remain in a safe and functional condition. No one enjoys fixing a leaking roof or a broken toilet when it comes to home maintenance.


The nicest aspect of having a home maintenance or repair fund is that it takes away the stress and concern you would otherwise have to deal with if you did not save one.


Having an emergency fund where you can easily access this money can make home repairs much less of a financial burden. It is more cost-effective to do preventative maintenance on your house, such as an annual roof inspection, or to fix smaller issues as soon as they arise rather than wait until major components, such as the roof, fail altogether.



Budgeting Ideas for Your Maintenance Costs, Replacement Costs, and Home Repairs

In spite of having paid off your mortgage in your affordable house and lot, your costs related to property ownership and investment will continue. You would also need to invest in regular repairs and weekly home maintenance to make sure your house looks and feels as nice as you'd hoped and is completely secure for you and your family.


In terms of regular maintenance and repairs, the important issue is how much money you should set aside each month. A home maintenance or emergency fund may be established with the aid of a savings goal, and having some ideas of how much to save will help you get started.



What are the average home maintenance costs?

It is recommended by some that you set aside around one percent of the home's purchase price annually for maintenance and replacement costs, or the "one percent rule of thumb." You may avoid financial strain in the future if you regularly put aside money monthly for house maintenance to be paid from your savings account or emergency fund.



Understanding the 1% Rule, the Golden Ratio of Home Maintenance

The average homeowner has no clue how much money they'll need to pay for necessary house repairs. In this case, the 1% rule of thumb is an excellent starting point for budgeting home maintenance costs.


The 1% rule of thumb states that homeowners should keep at least one percent of the home's purchase price every year for upkeep and repairs. It's a terrific illustration of how often conventional knowledge holds true in this case when applied to house maintenance savings.


When you choose to use the rule of thumb that maintenance charges will amount to around one percent of your home's worth, then you should set aside at least Php 60, 000 every year, supposing your home value costs Php 6 million.


However, this generalization may be off in certain cases due to contextual circumstances. This may be affected by various factors, including the home's age, condition, and the typical weather conditions it experiences.


Because of these factors, the 1% rule of thumb should not be seen as an absolute but rather as a benchmark from which further adjustments might be made.



How to Make Adjustments for the 1% Rule

Although the rule of thumb is a great starter guide in budgeting your home maintenance, it’s not foolproof.


With this, we may conclude that the 1% rule should only be used as a rough estimate when planning your annual home maintenance budget, and that you should still account for these factors and how they impact your spending.


A. Budgeting using the 1% Rule

If your house is between 1 and 10 years old and made of sturdy materials like fiber-cement siding and metal roofing, you may use the 1% rule of thumb to estimate how much maintenance it will need. This is also applicable if you don't have to worry about typhoons or storms since you live in a dry region.


Among the finest examples of these types of homes are the ones that Lumina Homes have. Our affordable house and lot for sale are made with concrete building structure and metal roofing, giving you premium safety and security in your homeownership journey. Aside from its flood-free location, it is also built through Cast-In-Place and Industrialized Building System (IBS), ensuring that your brand-new home can last the test of time and any natural disaster.



B. Budgeting using the 2% Rule

If your house is 10–20 years old, and made of durable materials like stucco siding, then you should allocate 2% of the value of your property to the upkeep. This is also advisable if you live in an area with a moderate climate.



C. Budgeting using the 3% Rule

When your house is over 30 years old and made from materials that require frequent repair, such as wood siding, you should allocate 3% of the property's worth on upkeep. This is also applicable if you reside in a region prone to flooding or severe storms.



Other Factors to Consider in Budgeting Your Home Maintenance Funds

You should know by now that the 1% rule is meant just as a suggestion, not a mandate. It's crucial to take into account the age and condition of the building's structure and the materials currently in use when planning a budget for routine home maintenance.


Indicated below are some examples of unexpected home repair and replacement needs:



Air conditioners

For its general lifespan:


Traditional aircon is 10 to 12 years

Inverter aircon is 15 to 20 years


Advisable general cleaning span:

Traditional aircon is once every year

Inverter aircon is every 3 to 6 months



Home exterior painting

Here are the estimated lifespans of common home exterior paintings:


Aluminum is 5 years

Brick is 15 to 20 years

Modern siding materials like fiber-cement are 10 to 15 years

Stucco is 5 to 6 years

Wood siding is 3 to 7 years



Roof replacement:

Here are the estimated lifespans of common roof replacements:


Asphalt shingles are 20 to 30 years

Galvanized iron sheets are 25 to 50 years

Polycarbonate sheets are 10 to 20 years


The financial and emotional commitments of homeownership are substantial. Although the down payment and closing fees account for the largest portion of the typical homeowner's budget, unanticipated house repairs may eat away at your savings for years to come. Establishing a maintenance budget and a savings strategy will allow you to relax in your house without worrying about coming up short if an emergency arises.


Invest now in the affordable yet quality house and lot packages from Lumina Homes and secure your safety and your family for years to come!

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