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As a homeowner, I’ve committed to saving for surprise expenses and avoiding deferred maintenance. Here’s why, along with some details on other key rules I’ve put in place.
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When I got a mortgage and bought my own property, I wanted to make sure I was making a good investment. That’s because buying a home isn’t just about finding a place to set down roots. It’s a major financial decision.
To make sure I didn’t end up regretting the impact buying had on my financial life, there are three rules I’ve set for myself as a homeowner. Here’s what they are.
1. Save up for surprise expenses
One of the main rules I set for myself was a rule designed to ensure I wouldn’t be caught off-guard by unexpected expenses associated with owning my own place.
As a homeowner, I don’t have a landlord to turn to who can help me make repairs if something breaks. It’s up to me to cover the costs when the fridge goes on the fritz or some other major or minor problem develops.
The Bureau of Labor Statistics report on consumer spending indicates the average spending on home maintenance, repairs, insurance, and other expenses came in at $2,335 in 2021. To make sure surprise home expenses don’t send me into debt, I’ve committed to saving 1% of my home’s value each year for repairs that may come up.
This is a rule I never break by setting up a transfer of the required amount each month into a special home repairs savings account.
2. Avoid deferred maintenance
Another major rule I set for myself was to avoid deferred maintenance. If something breaks — even if the issue is minor — I aim to get it fixed within a month. I also stay on top of routine tasks, like changing the air filters in my home regularly.
By avoiding deferred maintenance, I make sure my house doesn’t end up with a bunch of little stuff that’s broken and affects my enjoyment of the place and lowers its property value. This also ensures that little problems don’t turn into big issues and that I’m not going to get stuck paying a bunch of repair costs all at once.
3. Keep housing costs below 25% of my income
Finally, my last rule had to do with how much house I bought. I made sure to keep my housing costs below 25% of my income, even though lenders were willing to lend me more money than that since I don’t have any other debt.
It was important to me to set this rule and stick to the spending limit I was comfortable with so I didn’t end up house-poor. I didn’t want my mortgage loan payments to be so big that I had to work more than I wanted to or had to give up on other important goals.
By following these three rules, I’ve been able to cover any unexpected issues at home without stress. I’ve also been able to continue working toward my key financial objectives while enjoying living in a well-cared-for house.
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