As every new homeowner quickly learns, there’s a lot more to owning a home than just paying the mortgage. Every home—even new builds!—requires annual maintenance, upkeep, and repairs. Unless you start saving for these expenses, you’re going to feel the near-constant frustration of dealing with surprise costs and bills. But, how much should you save? In this article, we’ll provide you with an answer, along with some ideas for eventually growing your home maintenance budget into a headache-saving rainy day fund.

What should you set aside for maintenance and upkeep?

You’ve probably heard this one before: experts recommend you set aside 1-2% of your home’s value for maintenance and repairs in any given year. At the 1% figure, that means a homeowner with a property worth $200,000 should set aside $2,000 every year—or about $166 every month—for their home’s upkeep.

At face value, that might seem like a lot of money—and it is, for most families. But, what you’re really doing is acknowledging the reality of being a homeowner: things are going to break or need to be maintained, and you’re going to have to pay to fix them. A home maintenance budget just helps you plan ahead so that these events are less stressful and don’t turn into household debt.

However, there’s a pretty big flaw with this particular budgeting approach. There’s no connection between home maintenance costs, which is inherent to the property itself, and your home’s value, which is mostly determined by the market. You’ll need to make a market adjustment. A property in Omaha might be worth three times less than the same exact home in San Jose. In reality, both homeowners need to budget similarly to cover their home’s upkeep.

Invest in maintenance to grow your account

As you’ll soon find out, a single major repair—like your AC dying, or your water heater needing to be replaced—can completely wipe out the accumulated savings in your home maintenance account. If you want your account to grow and gain some traction, you’ll want to minimize the likelihood of breakdowns, problems, and repairs. The best way to do this is through seasonal maintenance and care for your home.

There are some maintenance projects you should invest in every single year. This includes schedule a spring AC tune-up and fall heater checkup. By having an HVAC contractor inspect and tune up your air conditioner ahead of summer, you’re much less likely to run into any major problems in the hottest months of the year. 

Not every maintenance project involves hiring a professional, however. From flushing your water heater to inspecting your roof and gutters, there are tons of year-round maintenance projects homeowners can comfortably tackle themselves.

You don’t have to be a home maintenance expert right away. As the years go by, homeowners become more experienced, learn from their mistakes or missteps, and find ways to take better care of their home. Don’t get frustrated with yourself when something goes wrong. Not every home problem or expense can be prevented.

How do you know if you’re saving too much?

Easy: there’s no such thing as saving too much. If you end up overfunding your home upkeep account, you can—and should—save the year-to-year rollover for future repairs and home improvement projects. Treat your maintenance savings as a specially dedicated rainy day fund: when something goes wrong, you’ll already have some cash set aside to help pay for it.

When possible, save extra and plan ahead for major projects. If you know your roof will need to be replaced in the next 5-10 years, start setting aside money now. It’s far easier to slip an extra $10 into your home maintenance account every month than it is to pay the surprise cost of a new roof when your current one finally fails.

Use your savings to improve the long-term value of your home

If you save consistently every month, you’re eventually going to end up with a healthy-sized account. You don’t have to use this for just repairs—you can draw some money out of this savings account to pay for home improvements, such as a kitchen remodel, that add long-term value to your home. Just make sure the remaining savings can cover any upcoming maintenance or repairs for the next few months!

To learn more about setting up a home maintenance budget and savings account, be sure to check out this infographic. It contains several other factors you should take into consideration when determining exactly how much you need to save for your property’s maintenance and upkeep.