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Budgeting for home repairs makes great sense because the cost of repairs or replacements can be sudden, unexpected and very large.

In the worst case scenario, the cost will exceed your savings and you will have to rush around trying to raise the money – often on unfavourable terms.

Budgeting enables you to raise a large reserve fund incrementally over a number of years in a manner which is relatively painless compared to having to find say £4,000 unexpectedly for a new boiler.

The term “repairs” is taken to include ongoing maintenance –  such as gutter cleaning each year – as well as replacement of something which is beyond repair, such as a rotten garden fence.   It also includes interior and exterior decorations.

1. What should you budget for?

Your budget should be for any home repair which may become necessary, including common items such as:

  • Boiler
  • Central heating
  • Electrics
  • Roof
  • Windows
  • Doors
  • Fences
  • Kitchen appliances and equipment
  • Bathroom appliances and equipment.

Where an item is damaged or destroyed as a result of accidental damage – such as by a storm or a burst pipe – your building or contents insurance cover may kick in, enabling you to claim from your insurer.

However, insurance will not normally cover wear and tear, deterioration or damage due to lack of repair. For such matters you will need to pay out of your own pocket. 


2. Benefits of budgeting

The benefits of budgeting include:

  • Creates a large reserve fund over time which can be used when necessary
  • Saving bit by bit over years is usually more manageable and less risky than having to find a huge sum at short notice
  • Gives peace of mind.

If you don’t  budget and don’t have a reserve or savings, you could be forced to borrow money at short notice on unfavourable terms. 

You may be compelled to use your credit card which is a particularly expensive form of borrowing.

If your position is very bad, you may have to resort to a pay day loan which, if not handled correctly, could push you into serious debt.

In an extreme case, you may be restricted to getting a loan which is secured on your property as a charge – adding an extra level of risk for you in the event of falling into financial difficulties at a later date.

5 must know things about building insurance (know them or risk paying the price)
3 biggest mistakes of UK homeowners (errors which will cost you dearly if made)
Don’t ignore maintenance & repairs (the first level of protection for your property)

3. The amount you should reserve

The amount you aim to have in reserve will depend on various factors including the type, size, age and condition of your home.

Older or period properties will generally need more maintenance and repairs than newly built properties.

If you know of something which is going to need repair or replacement in the foreseeable future, and you know or can find out the likely cost, you can work out the approximate amount you will need and can calculate a target reserve fund accordingly. 

In most instances however, a sum of £1,500 to £3,000 per year should be adequate. 

Even if you are only able to save a lower sum, you will have something to draw on in the event of need.


4. The budgeting process

Perhaps you already have a household budget. If you don’t, there is no good reason not to have one.

To get your repairs reserve going, simply include an element for repairs in your monthly budget.

If, for instance, your repairs reserve target is £1,500 per year you will need to put aside £125 per month.

5. A win-win situation

Having a reserve fund for repairs will give you funds to carry out a regular programme of maintenance which can significantly prolong the life of things like windows, doors and fences – saving you on more expensive repairs or maintenance in the long term.

Ongoing maintenance also has the benefit of keeping your home in tip top condition, enhancing your living environment and retaining or adding to the value of your property.

Budgeting for repairs will make things easier for you when you need to pay for big repair bills and will lessen the likelihood of you needing to borrow in order to get repairs done.

An attractive bonus of building a repair reserve is that you will have any unused reserve to spend as you wish if at any point it is no longer needed.    

Do you budget for repairs? If you don’t, why is that? Please leave your comments below.

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Dalton Barrett
Rebel Property Coach

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