Buying a home is a big step, and it’s important to plan your finances carefully. When you own a home, you not only pay for the house itself but also for its upkeep and any repairs that might come up. To handle these money matters well, you need to make a smart budget. This article will give you expert advice on how to budget for buying a home, taking care of it, and fixing things when needed. This way, you can enjoy your home without worrying about money problems.

When you’re planning to buy a home, there are important steps to take for a solid budget

First, figure out your budget: Take a close look at your finances to determine how much you can comfortably spend on a home. Think about your income, any debts you have, and what you might need to spend on in the future.

Remember hidden costs: Besides the price of the home itself, remember there are other costs like closing costs, property taxes, home insurance, and maybe even fees for a homeowners’ association.

Get pre-approved: Before you start looking at homes, get pre-approved for a mortgage. This helps you know exactly how much you can spend and makes you more attractive to sellers.

Think about the future: Consider what might change in your life, like getting a new job or having a bigger family. Make sure your budget can handle these changes.

Don’t overreach: It might be tempting to buy the biggest, fanciest house you can, but be careful. Think about how this decision will affect your finances in the long run. Make sure you have money left for savings, unexpected events, and other important financial goals.


How can I know the right amount of money to plan for when buying a home?

When planning to purchase a home, it’s important to know how much to allow in your budget – so you end up owning your home, and your home isn’t owning you. While most people are solely thinking of affording their monthly mortgage, you’ll need to account for more than that, including any downpayments, potential PMI (mortgage insurance if you don’t have a downpayment), ongoing costs (like insurance and taxes) and onetime costs such as moving and furnishing your house. While some loan programs, like those through the Federal Housing Administration, allow you to spend up to 31% of your gross income each month on a mortgage, try to keep that number lower – the recommended rule of thumb is generally 28% but 25% is even better. Keep in mind that the amount of debt you have plays into this amount, because the more debt you have, the tighter your budget will be. You’ll also need to budget for closing costs, and HOA fees (these will be ongoing each month) and ongoing maintenance for your home such as repairs, lawn care, etc. It’s a great idea to sit down with a financial planner and talk through your potential budget, not only to see if you can afford the house you’re wanting, but how it fits into the bigger picture of your finances.

Andrew Rosen – Diversified LLC


There are many financial considerations when it comes to buying a new home. However, the two that should be paid the most attention are the downpayment, how to generate enough cash to place a competitive offer, and the monthly mortgage payment (principal, interest, insurance and property taxes). Ideally, home buyers can put 20% down to obtain the best mortgage terms and remain competitive in a low-inventory housing environment. Its best to have the 20% downpayment available in cash, readily available and not subject to any market fluctuations so you’re able to move swiftly if the right home arises. Secondly, you’ll want to make sure you’re not purchasing a home that’s too expensive in terms of monthly cash flow. Generally speaking, your mortgage payment should not eclipse 28% of your gross income. Obviously, every situation is different and a financial plan that accounts for all aspects of your financial life is most important when making a big decision such as a new home purchase.

Levi Sanchez – Millenial Wealth


When planning to buy a home, several financial considerations are essential. Start with the down payment, typically between 3.5% to 20% of the home’s price. Factor in mortgage payments, which can be estimated using online calculators, and remember that closing costs generally range from 2% to 5% of the purchase price. Don’t forget about home insurance, property taxes, and, if relevant, HOA fees. Set aside 1% to 3% of the home’s value annually for maintenance and repairs. Consider utility costs, potential mortgage insurance (if your down payment is under 20%), and inspection and appraisal fees, which might total $500 to $1,000. Also, plan for moving expenses and maintain an emergency fund for unforeseen issues. Always seek advice from financial and real estate professionals for a localized understanding.

Brian Meiggs – My Millenian Guide


I think it all depends on where you plan to buy a home, how you’re going to finance it, your financial standing, and the interest rates if you’re taking a loan. Cash or bank? Usually, you’ll have to shell out a 20% down payment of the total selling price via bank finance. That is, if you’re credit-worthy and your income will qualify for the loan. Otherwise, you might have to prepare a bigger amount of money to purchase the home.

In our case though, we had to prepare a little bit over 60% of the selling price of the house we recently bought in the Philippines to retire here from Puerto Rico. We had it financed by a local bank, but the bank would only pay for half of the selling price. We ended up putting at least 60% to include the taxes and the other fees, such as home insurance and bank fees.

Also, you’ll need to factor in the interest rate if you’re home buying through bank. These days it’s higher anywhere in the world, so that will add up to your mortgage.

Jane Sardoma-Susaeta – This Mama Blogs


When considering a home purchase, it’s crucial to protect your lifestyle of freedom and avoid becoming house-poor. Plan for future changes by anticipating potential life shifts, career advancements, or major expenses to achieve this. Make sure your house budget allows flexibility to accommodate those potential changes without overwhelming your finances. It’s also important to be realistic about your needs versus wants when searching for a home. You can prioritize essential features that align with your lifestyle rather than being swayed by extravagant amenities or excessive square footage you rarely occupy. Focusing on what truly matters and maintaining financial balance can safeguard your freedom and prevent the burden of being house-poor.

Chris – TenantCloud


Are there some rules or advice I can follow to make a good budget for buying a home?

So, you’re thinking of buying a house? First, know what you’re making every month, including any side gigs or bonuses. Next, keep track of what you spend on things like Netflix, coffee runs, and those impulse online purchases.

Thinking about that mortgage? A good rule of thumb: don’t let it be more than about 28% of what you make before taxes. But remember, there’s more to a house than just the loan. Think about property taxes, insurance, and those pesky unexpected repairs.

Now, about that down payment. If you can, aim to put down 20%. It’ll mean a smaller loan, and you can dodge that annoying private mortgage insurance. Also, stash some cash for those “oops-the-roof-is-leaking” moments.

Future planning is key. Think about where you’ll be in a few years. Will your income change? Might you have new bills or expenses?

It’s tempting to go for that super fancy house but stick to what you can afford. Lastly, revisit your budget every now and then because, well, life happens.

Happy house hunting! Remember, it’s all about finding a place that feels right without breaking the bank.

Christopher Liew – WealthAwesome


I like to recommend home buyers take the amount they are qualified for and subtract 20%. Because home affordability is calculated using income and debt responsibilities, it doesn’t offer much room for saving — especially if you spend up to your maximum. Subtracting 20% from how much home you can afford ensures you’ll be able to afford the home and still be able to pay for maintenance, contribute to retirement, pay your debts, and hit other financial goals.

Lauren Bowling – Financial Best Life


While the Federal Housing Administration allows you to use up to 31% of your gross income towards housing costs, that can feel a bit too high when you really start to break it down. It can be more helpful to look at your budget in terms of the more concrete details that are directly affected by the house price: closing costs and your monthly mortgage payments.

Your closing costs are estimated to be between 3% and 6% of the loan amount, plus you’ll need to pay at least 3.5% to 10% of the purchase price as a down payment. So in total, you may need to have up to 16% of the home value in cash in order to close. Do you have that on hand?

Once you have that figured out, use a mortgage calculator to figure out how much your mortgage would potentially cost you on a monthly basis. Is that more or less than what you’re currently paying? Will you be able to comfortably afford it, plus any additional expenses that could come up?

Crunching these numbers will be the best way to find a maximum house price that works for you – way better than any generic rule of thumb could.

Kalleigh Lane – moneyGenius


Buying a home is a major financial commitment that requires careful planning and budgeting to avoid overextending yourself. When creating a home-buying budget, many people don’t consider all expenses beyond just the mortgage payment. It helps if you stick to tried and true rules of thumb and trying to focus on your needs rather than wants.

One key rule is the 28/36 guideline – your housing costs ideally would not exceed 28% of your gross monthly income. And total debt, including the mortgage, should ideally stay under 36%. This helps ensure that your home payment is affordable in the long run. Another mistake I have seen people make is to not factor in property taxes, insurance, maintenance, utilities, and furnishings when budgeting when buying a home.

Crunching the numbers for your exact debt/income ratio and down payment amount is also critical. As a financial planner with nearly 30 years of experience, I always told clients: “Don’t let excitement over your dream home cloud sound financial judgment.” Calculate your ratio, the required down payment percentage, and total monthly costs as accurately as you can.

Finally, create a realistic budget focused on necessities rather than luxuries. Don’t stretch yourself thin trying to afford too much house. I always advised clients to ask themselves: “What is the minimum I require to comfortably meet my needs?” Start there, then look for homes fitting your budget.

Following simple budgeting principles helps ensure homeownership is a wise investment for your family rather than a financial liability. With realistic planning and discipline, you can turn the dream of homeownership into a lasting and affordable reality.

Michael Ryan –


What are some common mistakes people make when budgeting for a home purchase, and how can I avoid them?

As a financial planner, I usually advise my clients to do three things when they’re considering buying a home.

First, establish an emergency savings fund with at least 3-6 months’ living expenses. Be sure to include expected utilities and other costs associated with owning a home.

Second, you should purchase a home that costs around 2 1/2 times your annual income. If you can’t find a home that meets this requirement, then you may want to wait to buy because you might not be able to afford the home in the long term. Over time, either incomes go up or home-buying opportunities present themselves.

Third, get a mortgage for as much as possible while avoiding private mortgage insurance. For most homebuyers, that means a 20% (or more) down payment. However, for people who qualify for a VA loan, there may be little or no cash down requirement.

People who purchase a home but don’t meet these three criteria usually run a higher risk of losing their home in the event of an economic downturn or a sudden loss of income.

Forrest Baumhover – Teach Me! Personal Finance


Achieve your dream of becoming a homeowner with a clear goal and action plan. Determine how much money you need to save and set a deadline. Take the following tips into consideration during your home search to avoid common mistakes:

1. Create a dedicated “House” fund and resist the temptation to use it for other expenses.

2. Remember to account for closing costs by adding an extra 3 to 5% of the loan amount to your savings goal.

3. Stay within your budget range and don’t let emotions sway you into overspending on the “perfect” house.

Brenda K. Uekert – Dr. Brenda Money Coach


It’s hard to get it perfect when budgeting – adjustments need to be made every month, no matter how long you’ve been doing it. It’s easy to get discouraged and quit, but the best thing you can do for your money management is to practice consistency. Keep it up, tweak it as needed, and know that it will never be perfect; it’s never done.

Don’t forget to plan for the things you know are coming. Christmas, back to school, and birthdays are going to happen. Be prepared with a little monthly savings to take care of these expenses. Christmas shouldn’t sneak up on you. It’s the same day every year.

Personal finance is personal. You can find a budgeting system that works best for you, whether it’s an app, a spreadsheet, a planner, or a paper and pencil. As long as it’s working, the method is irrelevant.

Sara – Frozen Pennies


Owning a house is what we all dream very big in many terms, and most of us often fail to be practical in terms of budget. So, when you plan to buy one, you better start by analyzing your current financial situation. Assess your current income, expenses, and outstanding debts, and make sure you have a good credit score if you are going for a mortgage, as it plays a role in your mortgage rates.

Apart from the mortgage payments, home ownership also brings many one-time or recurring expenses like property taxes, insurance, closing costs, home inspection fees, maintenance, and repairs. So, it’s also suggested to have a certain percentage (probably 2 – 3%) of your home’s value saved every year to cover these expenses without hurting your finances. A realistic budget is what makes your home purchase successful and helps you stay financially secure and enjoy your new home without any undue stress.

Siva Mahesh – Dreamshala


I got lucky when I bought my first home and made a good buy, but I think that actually made me overconfident because since embarking on my property journey, I have made some big mistakes, which have cost me financially. Here are some common mistakes I have seen people make when budgeting for a home:

1. Not getting clear on their budget: If you’re not clear on your budget, you may find yourself spending most of your salary on your mortgage and having very little disposable income for basic living. To avoid this, get clear on your financial situation: income, expenses, debts, and savings goals, and then decide how much you can spend on a mortgage.

2. Underestimating Total Costs: Many people focus solely on the mortgage payment and overlook other homeownership costs such as property taxes, insurance, utilities, maintenance, and HOA fees. To avoid this mistake, factor in all these costs when creating your budget.

3. Not saving for a downpayment or closing costs: It’s possible to get 100% financing, but being able to make a downpayment will cut down your monthly mortgage payments, which helps with your budget. To avoid this mistake, plan for your home purchase a year in advance and put aside a small amount into your savings account.

4. Not having an emergency fund: Things break down, the geyser bursts, and other emergencies arise in our homes. Having an emergency fund helps us take care of these unexpected events. To avoid this mistake, set up a savings account just for emergencies and put a small amount into that account.

5. Not Factoring in Interest Rates: As we’ve seen in recent months, interest rates have an impact on our monthly mortgage payments and can lead to many people defaulting on their repayments. To avoid this mistake, consider a worst-case scenario when purchasing your home. Play around with the numbers and see how a rise in interest rates would affect your budget.

Vangile Makwakwa – Wealthy Money


Not Budgeting For All Costs

A common and colossal mistake people make when purchasing a home is not budgeting for all costs.

It’s easy to focus on the home price, but you must also consider other costs, such as property tax, utilities, maintenance, home insurance, etc.

One way to find an estimate for all these costs is to work with your real estate agent. They might be able to get you rough estimates so you can understand what you can expect to pay.

For utilities, your realtor might have a history of utility bills from the previous owner that they can provide to you. If not, then you can find a way to contact the previous owners of your home and ask them for a rough estimate of how much they used to pay each month for utilities.

If you get this information, your budget will be more accurate, so you can make a more thoughtful decision if this house fits within your budget.

Not Being Honest About Your Finances

A huge budget mistake you can make when purchasing a home is not being honest about your finances.

You need to set a budget and stick to it, and you should definitely not underestimate the cost of your new home.

Underestimating these costs can lead to detrimental effects down the road, such as missed payments, making all purchases on credit cards, etc.…

Letting Emotions Overrule Your Finances

Another big mistake often made when home shopping is letting your emotions overrule your finances.

Let’s be honest; buying a home is exciting as it should be, but you cannot let your emotions take control over you, which can negatively impact your finances.

It’s easy to want the big house with all the bells and whistles, but is it worth it, and more importantly, can you really afford it?

Don’t get carried away; stick to your budget and find a house that you love and fits within your budget.

Michael Outar – Savebly


Often, when people are budgeting for a home purchase, they under allocate for maintenance and repairs. It’s not fun to think about the roof needing to be replaced or the furnace going out in the middle of winter, but homeowners need to consider everyday maintenance and save for bigger improvements and repairs as part of their initial home-buying budget.

The other mistake I see when people are buying a home is draining their cash reserves for the down payment. Putting down a big down payment is great! But you also need cash reserves for everyday emergencies when you get in the home, so make sure you are saving for a down payment AND an everyday emergency fund.

Nicole Cooley –


When buying a home, it’s easy to pick the most expensive home you can afford, but it’s often better to scale your budget back a little bit for a few reasons. If you buy at the top of your abilities, you could wind up draining your savings. While it’s normal to put a large down payment on a home, it’s important to maintain an emergency fund so you can get by if you experience an unexpected loss of income or a large unforeseen expense. You may also have new or higher utilities, trash pickup, homeowners association (HOA) dues, and more.

Speaking of unforeseen expenses, many homebuyers forget about the big, new costs they’re going to have to deal with compared to renting. Every month, you should plan on a mortgage payment that includes your loan payment, an escrow payment for your property taxes and insurance, and private mortgage insurance (PMI) if you put less than 20% down. In addition, it’s a good idea to put away funds every month for home upgrades and repairs. In your old rental, your landlord would have to pay for a new fridge, a broken down furnace, or flood damage from a busted pipe. When you own the home, you have to pay for everything yourself.

Owning a home is often more expensive than first-time buyers realize. Plan for unexpected repairs, which can be quite expensive. If you can cover your recurring bills and funnel funds into a dedicated home maintenance savings account automatically every month, you’re in the best position for long-term financial success as a homeowner.

Eric Rosenberg –


What factors should I take into account when determining the right budget for home maintenance expenses?

Certainly, determining the right budget for home maintenance expenses requires careful consideration of several key factors. First and foremost, take into account the age and condition of your home. Older homes often demand higher maintenance costs, while newer ones might require less frequent repairs.

Next, consider the size of your property. Larger homes typically come with increased maintenance needs, from roofing and HVAC systems to landscaping. Speaking of which, the climate in your region plays a role in maintenance. Harsh weather conditions can accelerate wear and tear, necessitating more frequent upkeep.

Regular maintenance tasks like painting, cleaning gutters, and servicing appliances should also be factored in. Setting aside around 1-3% of your home’s value annually for maintenance is a common guideline.

Additionally, it’s wise to establish an emergency fund to cover unexpected repairs, such as a leaking roof or a malfunctioning furnace. Prioritize major systems like plumbing, electrical, and HVAC, as neglecting these could lead to more expensive issues down the line.

Lastly, remember that local labor and material costs can vary, affecting your budget. Consulting with contractors or professionals can provide insights into the average costs in your area.

By accounting for these factors, you’ll be better prepared to create a comprehensive budget that safeguards your home’s value and your financial well-being.

Casey T. Smith – Wiser Wealth Management


A good guideline to remember is to allocate about 1% to 3% of your home’s value for annual maintenance. For instance, if your home’s worth $500,000, you’d want to save somewhere between $5,000 to $15,000 each year. However, the exact budget can differ due to a few factors:

1. Home’s Age & Condition: Older homes, especially those built a generation ago, might need more frequent and intensive care. They often come with dated materials or construction techniques. For instance, signs like a leaking roof could indicate impending heavy expenses, such as a potential $8,000 to $12,000 replacement.

2. Doing It Yourself vs. Hiring Pros: Know what you can handle and when to call in the experts. Spending a weekend painting rooms could cost you $100 to $300 for paint and supplies. But if you call in a pro, you’re looking at $200 to $500 per room. For serious things like electric and plumbing jobs, it’s always wise to rely on skilled professionals to ensure safety and compliance.

3. Shop Around for Services: If you’re planning a big project, I highly recommend getting multiple quotes. Thoroughly assess the proposed costs, material quality, work duration, warranty terms, and past client testimonials. From my experience, the cheapest quote is never the best because when the price is significantly lower than others may indicate a compromise in quality or material grade.

Ling – Finsavvy Panda


When determining the right budget for home maintenance expenses, consider the age of your property, the quality of its construction, and what makes you comfortable. The number of occupants and their lifestyles can also influence maintenance needs. I recommend setting aside 1-3% of the property’s value annually for maintenance. This approach ensures you’re investing enough to maintain a comfortable living environment without overspending.

It’s also important to budget for major replacements. For instance, HVAC systems have a finite lifespan, and there may come a point when it’s more cost-effective to replace them rather than continually repair them. By including potential big-ticket items in your budget, you’ll be better prepared for these expenses when they arise.

Remember, the goal is not just to maintain comfort but to strike a balance that also ensures financial efficiency. I recommend spending what makes you comfortable, but do not spend more or less than that! Do you really need that expensive faucet? But then again, do you really need a leaky one? Find the faucet that makes you satisfied.

Greg Wilson – ChaChingQueen


Home maintenance expenses can add up fast, and if you’re not ready for it, you can end up house poor. Similar to budgeting, when it comes to regular maintenance in a home, there are needs and wants.

Needs are things someone else will (likely) need to do for you (i.e., replacing the roof). On the other hand, wants are things you could do yourself but chose not to (i.e., mowing the lawn). While I’m no “Tim the Toolman,” I do like to perform a lot of my own home maintenance as it gives me satisfaction that I can do things other than talk about money.

To determine the right home maintenance budget, the most important thing to consider is frequency, then accrue for it based on how often you’re paid. For example, if your salary is paid twice a month, then accrue the amounts based on that schedule. You might place the account in a high-yield savings account for use when you need it.

Let’s say you need someone to cut the grass once a month at a cost of $20. Then, sock away $10 twice a month for this item.

Other maintenance costs, like roof replacement, will cost more – and you’ll likely need someone else to do it. I, for one, would be too chicken to get on the roof. Like any other maintenance accruals, if the roof costs $10,000 to replace and has 10 years of life left, and you expect to still live in the home when it needs to get replaced, then you’ll need to accrue a manageable $41.67 twice a month. Deposit the money in a high-yield savings account and use it when you need it.

Once you’ve tallied up all your needs and wants, you can then decide which items (if any) you’ll do yourself and which ones you’ll have someone else do for you.

By preparing in advance for maintenance issues that will come up, you’ll prevent yourself from an uncomfortable situation down the line.

Rick Orford –


Determining the appropriate budget for home maintenance requires carefully considering several factors. Firstly, consider the age of your home – older homes often need more frequent and costly repairs than newer ones. Next, assess the size and type of your property. Larger homes generally have higher maintenance costs, while factors like the materials used in construction and the complexity of the design can influence expenses.

Take into account the local climate. Homes in regions prone to harsh weather conditions may require more maintenance to withstand the elements. Regular inspections can prevent minor issues from escalating into major problems, saving you money in the long run. Also, could you factor in the cost of routine tasks like HVAC servicing, roof inspections, and gutter cleaning?

Research local service costs. Labor and material prices can vary widely depending on your location. Allocate funds for unexpected emergencies – having a contingency fund can alleviate financial stress when unexpected repairs arise. If you’re uncomfortable with DIY work, budget for professional services to avoid potential complications from inadequate repairs.

Lastly, consider your skills and availability. Some maintenance tasks can be tackled independently, reducing costs, but only if you possess the necessary expertise. Striking a balance between preventive measures, professional assistance, and budget constraints is essential for effective home maintenance planning.

Mark Catanzaro – Financial Pilgrimage


An old rule of thumb to estimate average spending on home maintenance is about 1% of the home value. This means if you have an $800,000 home, you’ll spend roughly $8,000 annually on home maintenance. When someone is budgeting how much house they can afford, they are usually looking at how the monthly mortgage payment affects cash flow. Therefore, that 1% home maintenance monthly cost needs to be budgeted into that overall affordability decision. In this example, that $8,000 estimate should be budgeted as a monthly expense or $666 monthly going into savings ($8,000 / 12 months).

However, that 1% might not be enough for all of the projects a new homeowner wants to complete. In Seattle, it’s easy to purchase a home that hasn’t been updated in a while. A lot of new homeowners spend a lot more than that 1% catching up on maintenance or renovations over the first several years of home ownership. Renovations in Seattle are expensive, so the cost can easily be more like 20%-40% of the home’s value over many years. The reality is these projects are completed with bonuses, financing, or other irregular infusions of resources over time.

Mindy Crary – Creative Money


Owning a home can be rewarding – but it’s also expensive. It’s important to consider the cost of ongoing home maintenance, as well as emergency repairs, when you write a budget.

It’s not easy to determine how much to budget for home maintenance, but there are a few guidelines to follow.

You can set aside 1%, annually, of your total home purchase price or your home’s current value. However, you may end up with a number that’s too big or too small depending on real estate costs. Alternatively, expect to spend 10% of your monthly mortgage, including principal, interest, taxes, insurance (PITI).

For a more accurate figure, set aside $1 for every square foot of your home. A 1,500 square foot house would need $1,500 annually.

It might be worth purchasing a home warranty, which will cover some maintenance and also repairs required due to regular use and wear-and-tear. A warranty has a stable monthly cost that can help you budget.

Always factor an emergency savings fund for home repairs into your budget. Set aside at least the amount of your home insurance deductible, typically between $500 to $2,000. That way, you have money available in case you make an insurance claim. That money can also cover smaller repairs if you don’t have a home warranty.

Dawn Allcot – Crediful


There are a number of things to take into account when deciding on a budget for home maintenance. The age of your home is a primary factor. Older homes might require more maintenance than newer homes. Systems such as plumbing, roofing, and electrical might wear out, need updates, or not meet current codes.

Also, the size and type of home plays a part. Larger homes or homes with complex layouts might have more maintenance needs than smaller, simpler homes.

Homes built with high-quality materials and superior craftsmanship tend to require less frequent maintenance than homes built with inferior materials.

Homes in areas with harsh climates (extreme cold, heat, humidity, or salty air) might require more frequent maintenance. Similarly, a home located in a forested area might have different maintenance needs than one in an urban setting.

One common recommendation is to set aside 1% to 3% of the home’s initial purchase price each year for maintenance and repairs. For instance, if your home is worth $200,000, you might set aside $2,000 to $6,000 annually. However, this is a general guideline and might not apply to all situations.

DIY vs. Hiring Professionals: If you can do some maintenance tasks yourself, you might save on labor costs. However, for some tasks, especially those requiring specialized skills or tools, hiring professionals might be safer and more cost-effective in the long run.

Cost of Living in Your Area: Maintenance and repair costs might be higher in areas with a higher cost of living. Research local labor and material costs.

Frequency of Maintenance: Some tasks are seasonal, some annual, and some might be every few years, like painting the exterior of a home.

Check Warranties: Some appliances or systems in your home might still be under warranty, which can reduce your maintenance costs.

Michael Reynolds – Elevation Financial


Mastering home maintenance budgeting: Navigating the benefits of a home warranty

Budgeting for home maintenance is crucial to ensure that your home remains in good condition and unexpected repair costs don’t catch you off guard. A home warranty can also play a role in managing maintenance costs, but it’s important to understand its relationship with your budgeting efforts. Here’s a step-by-step guide on how to budget for home maintenance and its relationship with a home warranty:

1. Assess Your Home’s Condition: Take stock of your home’s current condition. Consider the age of the home, appliances, and systems. Older homes might require more frequent and costly maintenance.

2. Estimate Annual Maintenance Costs: Research and estimate the average annual maintenance costs for various aspects of your home, including HVAC systems, plumbing, roofing, appliances, and more. Consider both routine maintenance and potential repairs.

3. Create a Separate Maintenance Fund: Set up a separate savings account or designated fund specifically for home maintenance. This will help you avoid using funds meant for other expenses.

4. Determine Home Warranty Coverage: Understand the coverage offered by a home warranty. Home warranties typically cover major systems and appliances, such as HVAC, electrical, plumbing, and kitchen appliances. Read the terms and conditions carefully to know what’s covered and what’s not.

5. Compare Costs: Compare the cost of a home warranty to your estimated annual maintenance costs. Keep in mind that home warranties require an upfront or annual fee, so ensure that the warranty cost is lower than what you’d expect to spend on maintenance.

6. Budget for Home Warranty: If you decide to purchase a home warranty, include the cost in your annual budget. Allocate funds to cover the warranty premium.

7. Allocate Funds Monthly: Divide your estimated annual maintenance costs by 12 and set aside this amount each month into your maintenance fund. This will help you build up a reserve over time.

8. Prioritize Emergency Fund: In addition to your maintenance fund, maintain a separate emergency fund to cover unexpected repairs or situations not covered by the home warranty.

9. Regularly Review and Adjust: Periodically review your budget and adjust your maintenance fund contributions if necessary. If you make claims against your home warranty, consider adjusting your budget to reflect any changes in covered items.

10. Be Prepared for Out-of-Pocket Costs: Remember that even with a home warranty, there may be out-of-pocket costs such as service call fees or situations not covered by the warranty.

11. Consider Cancelling/Renewing: Each year, evaluate whether the home warranty is saving you money or causing unnecessary expenses. Cancel or renew the warranty based on your experience and needs.

12. Keep Records: Maintain records of maintenance and repairs performed, as well as any interactions with the home warranty provider. This documentation can be helpful when making claims or seeking reimbursement.

Remember, while a home warranty can provide a level of financial protection, it’s not a replacement for proactive budgeting and regular home maintenance. By budgeting for home maintenance and understanding the relationship between your budget and a home warranty, you can better manage your home-related expenses and ensure the longevity of your property.


When you move into your new home, you take on responsibilities as a homeowner. The tips in this article will help you handle these responsibilities wisely. By budgeting smartly for buying your home and setting aside money for repairs and maintenance, you can keep your home in good shape and your mind at ease. Listening to advice from experts will guide you smoothly through your homeownership journey so you can create wonderful memories in the place you now call home.

Settling into your new space is just the beginning of the home buying adventure. There’s an undeniable charm in personalizing each corner, adding a splash of your personality to the interiors, and seeing your dreams materialize before your eyes. But it’s equally essential to remember the practical side of homeownership, which means staying prepared for the unexpected. Regular maintenance check-ins, understanding your property’s ins and outs, and cultivating a proactive approach will not only prolong the life of your home but also enhance the quality of the moments you spend in it. So, dive into this exciting chapter with both enthusiasm and diligence.