Don’t Let Major Home Repairs Put You in the Hole: Tips to Cover the Cost on a Budget

Owning your own home is exciting. It takes some budgeting, especially when you factor in the cost of the mortgage and home insurance, but it’s doable. That is until you are hit with a costly home repair that threatens to put you in the hole. You can’t predict your home’s future, but the following tips will not only help you save and budget (especially when money is tight), but they will also provide guidance on what the heck to do should disaster strike.

Know the Cost

Routine home maintenance is a must, but no matter how meticulous you are about taking care of your home, systems won’t last forever, meaning repairs and replacements will be necessary. How much can you expect to pay? It all depends on the extent of the repair. For example, a new part for your HVAC system might cost about $250, while a completely new unit could set you back $9,000. The roof is another costly area — new shingles or a quick patch job average about $150, but an entirely new roof is about $14,000, depending on the square footage. The good news is that once these repairs are made, you are set for years to come. With such high prices, it might be worth your while to learn more about your home’s systems, such as the HVAC system. An easy way to maintain your unit: change the air filter on a regular basis. And to keep these items within your budget, use offers like Lowe’s promo codes to keep the costs low.

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Build Up a Home Maintenance/Repair Fund

In the same way that you likely have savings built up for a rainy day, you need to have a separate savings account that you designate as your home maintenance/repair fund. According to Generation X Finance, the easiest way to do this is to “tack on 10% to your base mortgage payment and use that to cover the costs that aren’t advertised when you buy a home.” This fund can be used to make major repairs as well as pay for maintenance, such as regular furnace cleanings or a new mower. There are plenty of easy ways to add to this fund each month. For example, use a water filter to reuse water bottles, save your change, take lunch to work, buy secondhand instead of new clothing, and limit the drive-through meals to twice a month. Add the amount you save to your home maintenance fund.

Have a Plan for an Emergency

If the basement suddenly floods or a pipe bursts, putting it off until later isn’t an option. Unfortunately, your emergency fund might not be enough to foot the bill, so what payment options do you have? Rather than putting off other payments or building up credit card debt, opt for smarter options, such as a personal loan or home equity line of credit (HELOC). If you’re lucky, your homeowner’s insurance will cover the repair, but some things aren’t covered, such as mold damage, sewage backup, or floods unless you have a separate flood policy. It’s a good idea to go over your current insurance policy with a fine-tooth comb to thoroughly understand your coverage, limits and any clauses. It can be a little bit confusing, not to mention overwhelming, so check out this guide to help you decipher your policy and decide if a new or updated one should be in the cards.

Know When to Hire a Pro

When something goes wrong in your home, your first reaction is to call in a professional. While there are a few small repairs you can do yourself, such as unclogging a drain, putting up new weather stripping, or testing your GFCIs (ground fault circuit interrupters), major repairs are a professional’s job. However, it is important to know the difference between a contractor and a handyman. A contractor is licensed by the state, must maintain this license via exams and training, and must offer liability insurance. A handyman is just the opposite, although they may still be very skilled in their trade. Major repairs should be done by a licensed contractor for your peace of mind.

Major repairs make owning a home expensive. However, you can avoid a total surprise by saving up now. You’ll be ready when the inevitable happens, and your finances won’t have to take such a hard hit.

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This article was guest blogged by our friend, Julian Lane. Follow Julian's passion for DIY home fixes at TheFixItChamp.com

Julian Lane believes that creating his home is his expression of art. In high school, Julian started using any materials he could find to update his bedroom. He began with making a desk, a desk chair, a bookcase, and then a headboard. His parents took notice and soon had him improving the house piece by piece.

Julian’s thrill for every project is to make the job look like a professional did it. Between trial and error and searching the Internet for the best tips, he became obsessed with little touches that set projects apart from the DIY masses. TheFixItChamp.com is Julian’s way of sharing quality DIY resources along with safety and a touch of design.