|
|
Home Repairs and Maintenance Budget question
03-01-2013, 09:44 AM
|
#1
|
Recycles dryer sheets
Join Date: Aug 2009
Location: Southern California
Posts: 489
|
Home Repairs and Maintenance Budget question
Dear Forum Members,
I realize that it would not matter what I call it or how I manage it --- "It" being home maintenance and repair expense since whenever something needs to be done then we would have to spend the money to get it fixed, etc. But here's my question: I've just redone my budget to put $430 per month to the line item called Home Repair/Maintenance. $5160 per year. I plan to track all home repair and maintenance against that budget.
Should I continue to let that budget accumulate year after year? If no repair is needed this year should I roll that $5160 forward and keep adding to that line item next year etc. such that by end of next year my home repair fund (if no expenses were incurred) would grow to $10,320 etc? Conceptually this is just like the depreciation on our car or any other big ticket item. I budget a certain amount monthly toward the cost of eventual replacement of my vehicle(s) etc.
How do you think about/manage/track your home repair and maintenance? Do you set money aside and never touch it and keep adding to it and spending only from that fund for that particular type of expense?
Thank you for sharing.
Retire2014
|
|
|
|
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!
Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!
You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!
|
03-01-2013, 09:51 AM
|
#2
|
Full time employment: Posting here.
Join Date: Aug 2012
Location: Upstate
Posts: 699
|
It's your choice and I expect you'll get a number of good answers and ideas. We're spending pretty much all of what we budget each year in this category, but if we weren't, I think we'd prolly (sic) carry over some portion of any surplus (e.g. we may have an idea of upcoming expenditures but just got "lucky" that they didn't occur in the current year).
Tyro
__________________
Yeah well, that's just, ya know, like, your opinion, man. ~ The Dude
|
|
|
03-01-2013, 09:52 AM
|
#3
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2008
Location: NC
Posts: 21,303
|
I use an accrual account, knowing it will vary dramatically from year to year. Here's a basic description note "accrual" comments http://www.early-retirement.org/foru...ml#post1279443
Unlike all other expense categories, annual variance are meaningless for the "accrual" expense category. But we know that, and can track all other variances.
We average $10K a year for accruals, but some years we know we'll spend twice that or more, and nothing other years. We simply made a spreadsheet planning on buying new cars every 5 years, a new roof every 15 years, new appliances every 20 years, etc. and then averaged over 30 years. Your frequency and items will be your own, but you know what your history has been from past decades.
But there are several workable ways to deal with major expenses that occur (much) less than annually, the key is accounting for them somehow. There's no good reason to be surprised when you buy a car, replace your roof/furnace/AC/appliances/furniture, remodel, etc. - we all know they'll happen sooner or later.
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57
Target AA: 50% equity funds / 45% bonds / 5% cash
Target WR: Approx 1.5% Approx 20% SI (secure income, SS only)
|
|
|
03-01-2013, 10:05 AM
|
#4
|
Thinks s/he gets paid by the post
Join Date: Feb 2012
Location: Tampa Bay Area
Posts: 1,866
|
Quote:
Originally Posted by Midpack
I use an accrual account, knowing it will vary dramatically from year to year. Here's a basic description note "accrual" comments http://www.early-retirement.org/foru...ml#post1279443
Unlike all other expense categories, annual variance are meaningless for the "accrual" expense category. But we know that, and can track all other variances.
We average $10K a year for accruals, but some years we know we'll spend twice that or more, and nothing other years. We simply made a spreadsheet planning on buying new cars every 5 years, a new roof every 15 years, new appliances every 20 years, etc. and then averaged over 30 years. Your frequency and items will be your own, but you know what your history has been from past decades.
But there are several workable ways to deal with major expenses that occur (much) less than annually, the key is accounting for them somehow. There's no good reason to be surprised when you buy a car, replace your roof/furnace/AC/appliances/furniture, remodel, etc. - we all know they'll happen sooner or later.
|
I do the same.
__________________
"For the time being no discipline brings joy, but seems grievous and painful; but afterwards it yields a peaceable fruit of righteousness to those who have been trained by it." ~
Hebrews 12:11
ER'd in June 2015 at age 52. Initial WR 3%. 50/40/10 (Equity/Bond/Short Term) AA.
|
|
|
03-01-2013, 10:12 AM
|
#5
|
Administrator
Join Date: Jan 2008
Location: Chicagoland
Posts: 40,712
|
We keep a separate fund for the big things, such as roof and major home repairs. Smaller expenses, such as an appliance repair, come from the current year budget.
|
|
|
03-01-2013, 10:15 AM
|
#6
|
Thinks s/he gets paid by the post
Join Date: Feb 2012
Location: Tampa Bay Area
Posts: 1,866
|
Retire2013: I should have mentioned that 5k a year seems a bit high. I'm using 1.5% of home value annually. Could you share how you came up witht he 5k ? Worried that I may be short in my budget. Thanks
__________________
"For the time being no discipline brings joy, but seems grievous and painful; but afterwards it yields a peaceable fruit of righteousness to those who have been trained by it." ~
Hebrews 12:11
ER'd in June 2015 at age 52. Initial WR 3%. 50/40/10 (Equity/Bond/Short Term) AA.
|
|
|
03-01-2013, 10:23 AM
|
#7
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2008
Location: NC
Posts: 21,303
|
Quote:
Originally Posted by Live And Learn
Retire2013: I should have mentioned that 5k a year seems a bit high. I'm using 1.5% of home value annually. Could you share how you came up witht he 5k ? Worried that I may be short in my budget. Thanks
|
Just to compare notes, I agree on home expenses, but how do you deal with periodic car purchases? That's our biggest accrual expense, we pay cash (that may be my answer).
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57
Target AA: 50% equity funds / 45% bonds / 5% cash
Target WR: Approx 1.5% Approx 20% SI (secure income, SS only)
|
|
|
03-01-2013, 10:28 AM
|
#8
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2002
Location: Texas: No Country for Old Men
Posts: 50,021
|
Quote:
Originally Posted by Midpack
... we pay cash (that may be my answer).
|
+1
There are so many zero percent financing deals around, I went that direction on my last purchase rather than forking over a lump sum.
__________________
Numbers is hard
|
|
|
03-01-2013, 10:37 AM
|
#9
|
Full time employment: Posting here.
Join Date: Dec 2010
Posts: 576
|
REWahoo
How much did you budget for house repair in the event of an asteroid strike?
|
|
|
03-01-2013, 10:42 AM
|
#10
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2002
Location: Texas: No Country for Old Men
Posts: 50,021
|
My complete net worth - including the house.
__________________
Numbers is hard
|
|
|
03-01-2013, 10:50 AM
|
#11
|
Thinks s/he gets paid by the post
Join Date: Jul 2012
Location: Mississippi
Posts: 1,894
|
I keep a contingency fund for things like this rather than budget because it's such an unknown as to when/if/how much.
But the amounts seem high to me. In 12 years I have spent less than 2k on what I consider maintenance. I replaced an AC compressor, and I just repainted the exterior trim, replaced some soffit / facia ( DIY ). What are you actually spending 500/month on ?
|
|
|
03-01-2013, 10:53 AM
|
#12
|
Thinks s/he gets paid by the post
Join Date: Jul 2012
Location: Mississippi
Posts: 1,894
|
Quote:
Originally Posted by Midpack
Just to compare notes, I agree on home expenses, but how do you deal with periodic car purchases? That's our biggest accrual expense, we pay cash (that may be my answer).
|
Last vehicle lasted 15yrs/220k miles. That was a work commuter. I only do a fraction of the miles now. If I get to 200K on the current one at my present mileage rate... well I should be dead before the car is.
|
|
|
03-01-2013, 11:09 AM
|
#13
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2005
Posts: 17,239
|
Quote:
Originally Posted by Live And Learn
Retire2013: I should have mentioned that 5k a year seems a bit high. I'm using 1.5% of home value annually. Could you share how you came up witht he 5k ? Worried that I may be short in my budget. Thanks
|
I think it makes a difference where you live on what % to use...
IOW, if you live in expensive Calif.... then the price of the house and the cost of repair probably does not compare with a lot of other places... the land cost is very high, so you have a small house that does not cost the same to repair or replace based on the total cost of buying a house...
I also think that it makes a difference if you put minor expenses in the category.... IOW, you have a dripping faucet, or a running toilet... is that in there or not... or even a bigger items such as pipe leak or a clogged drain... For me, I put all the Home Depot/Lowes, plumber if needed, AC guy etc. etc. expenses in there and they can add up over a year...
|
|
|
03-01-2013, 11:37 AM
|
#14
|
Full time employment: Posting here.
Join Date: Dec 2010
Posts: 576
|
Looking at all the posts about home repair bills and budgeting a reserve for such items nudge me more in the direction of renting in ER.
|
|
|
03-01-2013, 11:39 AM
|
#15
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2008
Location: NC
Posts: 21,303
|
Quote:
Originally Posted by rbmrtn
Last vehicle lasted 15yrs/220k miles. That was a work commuter. I only do a fraction of the miles now. If I get to 200K on the current one at my present mileage rate... well I should be dead before the car is.
|
I drive my cars longer than most, but I don't want DW driving an old car. YMMV
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57
Target AA: 50% equity funds / 45% bonds / 5% cash
Target WR: Approx 1.5% Approx 20% SI (secure income, SS only)
|
|
|
03-01-2013, 11:53 AM
|
#16
|
Recycles dryer sheets
Join Date: Aug 2009
Location: Southern California
Posts: 489
|
Quote:
Originally Posted by Live And Learn
Retire2013: I should have mentioned that 5k a year seems a bit high. I'm using 1.5% of home value annually. Could you share how you came up witht he 5k ? Worried that I may be short in my budget. Thanks
|
You and I are thinking along the same line. The $5,160 per year amount is less than 1% of my current home value (based on real estate comps). I hope this will be sufficient. I will not look at any amount leftover at year-end as "extra" money to be spent on frivolous things. My plan is to continue to add to this repair fund so that the one year when I may need a new roof, I will not be traumatized!
|
|
|
03-01-2013, 11:57 AM
|
#17
|
Recycles dryer sheets
Join Date: Aug 2009
Location: Southern California
Posts: 489
|
Quote:
Originally Posted by rbmrtn
I keep a contingency fund for things like this rather than budget because it's such an unknown as to when/if/how much.
But the amounts seem high to me. In 12 years I have spent less than 2k on what I consider maintenance. I replaced an AC compressor, and I just repainted the exterior trim, replaced some soffit / facia ( DIY ). What are you actually spending 500/month on ?
|
One of the reasons that I put aside $430 per month on home repairs and maintenance is because I am a woman living alone and I lack the know-how to do any home repair work. Hence, I must put aside enough money to be able to pay others for that work when the need arises. It would be nice if actuals will turn out to be much less than budgeted.
|
|
|
03-01-2013, 11:58 AM
|
#18
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2007
Location: New Orleans
Posts: 47,500
|
To be honest, I have a lot of "slop" in my budget and that helps. Also my SWR is very low because I am cautious by nature. I guess I could handle up to about $30K-$40K during the year by upping my withdrawal to 4% that year and cutting back on my discretionary spending. I have only had to do the latter, so far.
If an uninsured expense higher than $40K arose, well gosh, I don't know. I could loan myself money from the next year's withdrawal, I suppose, and cut back spending for two years. But you know, my house is only worth about $170K or so, so that does not seem likely to happen.
Last year I needed a new hot water heater, so I just cut back a little on discretionary spending that month. I did the same to pay for replacing my carpet when water got into my house due to Hurricane Isaac, since it did not meet the deductible on my insurance. Basically, I just wait to do my discretionary spending until problems like that have been paid for and I find money left over.
Me too! I just call my handyman, plumber, electrician, or whoever. Problem solved. That reminds me; I need to call my handyman and have him fix a few things....
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities. - - H. Melville, 1851.
Happily retired since 2009, at age 61. Best years of my life by far!
|
|
|
03-01-2013, 12:49 PM
|
#19
|
gone traveling
Join Date: Jul 2007
Posts: 333
|
I guess I'm lucky in that I'm able to do most of my maintenance (cars, home, appliances, electrical, plumbing, property, etc) myself "if it's repairable". It has really helped me to be able to do these things myself since it can take a while to get anyone out to fix anything when you live a ways out in the country. My overall maintenance cost have been so low in the past 10 years (lucky so far I guess) that I don't even think about it as "a line item" anymore. I know some folks can't or don't want to do their own but for me it's worth it to avoid the cost but mainly the hassle of dealing with service or repairmen. While I don't budget for it, I do mentally expect to spend ~$1000 a year on maintenance parts and/or a major new appliance.
|
|
|
03-01-2013, 01:13 PM
|
#20
|
Thinks s/he gets paid by the post
Join Date: Oct 2006
Posts: 4,629
|
Quote:
Originally Posted by Retire2013
Dear Forum Members,
I realize that it would not matter what I call it or how I manage it --- "It" being home maintenance and repair expense since whenever something needs to be done then we would have to spend the money to get it fixed, etc. But here's my question: I've just redone my budget to put $430 per month to the line item called Home Repair/Maintenance. $5160 per year. I plan to track all home repair and maintenance against that budget.
Should I continue to let that budget accumulate year after year? If no repair is needed this year should I roll that $5160 forward and keep adding to that line item next year etc. such that by end of next year my home repair fund (if no expenses were incurred) would grow to $10,320 etc? Conceptually this is just like the depreciation on our car or any other big ticket item. I budget a certain amount monthly toward the cost of eventual replacement of my vehicle(s) etc.
How do you think about/manage/track your home repair and maintenance? Do you set money aside and never touch it and keep adding to it and spending only from that fund for that particular type of expense?
Thank you for sharing.
Retire2014
|
In our house, the bold makes the rest of the question kind of moot. We know we're going to replace the roof, furnace, AC, washer, dryer, hot water heater, dishwasher, stove, fridge, microwave, and garage door opener when the fail. We know we'll withdraw from the IRA if monthly income doesn't cover a big expense.
The decision point is behind us - estimated costs were included in the decision to retire when I did. The next future decision point would be when/if we're considering selling the house. Between now and then, we'll just record expenses.
Of course, we record all of our expenses, and look at the totals periodically. But for us that's not because we want to force them to conform to some original plan.
(I have a daughter who uses electronic "envelopes" - literally separate savings accounts at her bank - to bucket certain erratic expenses. She does it so she doesn't feel guilty about spending money on "fun" stuff right after she gets the car fixed. But, we've done LBYM for so long that we don't need that type of self discipline.)
|
|
|
|
|
Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
|
|
Thread Tools |
|
Display Modes |
Linear Mode
|
Posting Rules
|
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts
HTML code is Off
|
|
|
|
» Recent Threads
|
|
|
|
|
|
|
|
|
|
|
|
|
» Quick Links
|
|
|