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Does anyone have any good ideas/estimates/sources for how my wife and I should budget for upkeep of the flat we've just bought and moved into.

Most of the "hidden costs of home ownership" articles are actually about things like paying utilities bills (we already paid those in our last rental), parking permits (we don't drive), service charges (well, obviously! We treated those as a component of the mortgage payments for budgeting).

I'm interested in how we should budget for things like:

  • Repairing/Replacing the boiler/washing machine/dish washer when it breaks.
  • Employing plumbers/electricians to fix things like a leak or a socket that died.
  • Repainting now and then.
  • Maintaining Furniture/curtains/general furnishings.

Obviously all of these costs are wildly variable per-month, and even per-year, so it would clearly be a case of assigning a certain amount per month to be put in a "house upkeep" budget pot that is intermittently dipped into to pay for such events.

But how do we go about choosing that monthly figure? Is is just a case of "guess, double it, and hope it works out ... and review it intermittently to judge whether it needs increasing".

There are obviously two very separate parts to this question: * What sort of figures are a sensible estimate for those costs? and * if I have an estimate, how should I apply that to our monthly budgetting?

For this forum, I'm asking the SECOND question. If I got good figures for estimates of these various tasks, what thoughts do people have on how to apply those figures to budgetting.

I shall post the same context in the Personal Finances forum, to get answers to the FIRST question. Please attempt to keep answers in on topic in the relevant forum, to placate the moderator gods.

Brondahl
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2 Answers2

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While it may be tempting to try to budget for this, you really can't for most of the unknowns. That is why many financial advisor tell you to put away several thousand dollars into a life-happens fund. That covers those surprises that can cost hundreds or thousands of dollars with little advance warning. Of course those events can alo involve things that aren't related to home ownership: cars, computer, furniture, TV...

What you can start to budget for is those annual maintenance items such as getting the furnace/AC checked, or the fire place cleaned.

The other types of costs can only be paid for either by saving money over months or years, or via some type of loan. These are the big items like a new roof, or a new furnace. Hopefully you will have enough advance warning so that you don't have to scramble at the last minute.

When we were first starting out we had zero idea how much these items would cost. we just kept a sub-account in the bank and dipped into it only for these home ownership expenses. Now we have a better idea of what it costs for us.

My advice is to pick a number for the life-happens fund, and a timeline. Then start putting money aside to get to that number within that timeline. If you do have to spend some of the money, then you readjust to build it back up in a couple of months. After a few year you will know what it costs for you to cover these items.

mhoran_psprep
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It is actually possible to make an estimate of how much replacing capital items will cost you. You can do this by averaging.

For each item you might have to replace, find the cost of replacing it, and divide that by the number of years you expect it to last. So if a new stove would cost you $1000, and yo expect it to last ten years, budget $100 per year for replacing it. If it would cost you $3000 to paint your home, and you expect to do it every fifteen years, budget $200 per year. If you know how old your appliances are, factor that in too - divide the replacement cost by the expected life left.

Now most of those won't happen in any given year, but the expectation is that they will average out. It may not help you get an accurate spending prediction in any given year, but over many years it should be more accurate.

For maintenance and repairs, you can ask other people in the same position to get an estimate. After a couple of years you will have a much better idea of your own circumstances and can budget better.

As @mhoran_psprep says, because these will be averages, it's important to build up a contingency fund so that if by ill luck both the stove and dishwasher need replacing in the same year, you aren't left without enough money to do it.

DJClayworth
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