If you take a look around your neighborhood, you’ll probably see many different homes — and odds are some of those homes will look better than others. Every homeowner has their own style when it comes to maintaining their humble abode but one thing’s certain: taking care of your home as it ages is going to cost you. If you’re diligent about staying ahead of issues, you may pay a little more out of pocket every month, but in the long run, you may wind up saving thousands.

Depending on how a home has been cared for, you can expect to pay about 1% of your home’s current market value in annual maintenance expenses. The good news is there are ways to think about saving and budgeting for the inevitable repair or replacement of your home’s big-ticket items.

Do you know how much to budget for home maintenance? We’re here to help you narrow down that elusive number so you can manage your home’s budget with greater certainty.

Calculating how much to budget for home maintenance

So, how much should you budget for home maintenance costs? There are a few good rules of thumb to consider that can help you sock away cash for a day in the future when you’ll need it.

The 1% rule

There are many ways to consider saving up and budgeting for home maintenance costs. The 1% rule is a good standard because it’s so easy to remember. Put aside 1% of the total purchase price of your home for home maintenance repairs. For example, a $250,000 home would require you to save $2,500 annually, or about $209 per month.

It’s a rough estimate that doesn’t consider labor costs or materials, and other factors can contribute to this base price.

The square foot rule

Budgeting for the eventual breakdown and replacement of major home systems like a new roof or replacing a sump pump may not be easy, but it is possible. If you’re wondering about how to estimate property maintenance costs, the square foot rule can be helpful, and it’s another really easy way to put money away for repairs and home maintenance.

Budget about $1 for every square foot of livable space, every year, for annual home maintenance costs. And this rule is also applicable for estimating new home maintenance costs. So, a 2,500-square-foot home would require a $2,500 budget annually or about $209 per month.

Set aside 10%

Another great way to budget for home maintenance is to put away 10% of your main monthly expenses every month. That’s 10% of your mortgage, 10% of your property taxes and 10% of your insurance costs placed into a savings account every month.

Suppose you’re spending this much every month:

• $1500 on mortgage
• $350 on taxes
• $200 on home, car and life insurance

10% of each of those figures is: 150 + 35 + 20, or a monthly savings plan equating to $205. Estimating your annual home maintenance costs can be difficult but saving up that cash doesn’t have to be.

Protect yourself from unexpected losses

Even if you save for home maintenance costs, unexpected losses, such as a house fire, can instantly exhaust those resources. That's why having an up-to-date home insurance policy is essential to your home maintenance budget.

Contact your American Family Insurance agent for a policy review today. They can help ensure your home insurance delivers the peace of mind protection you need. They may also be able to help you save money on your premium with our bundling discounts and savings programs.

This article is for informational purposes only and based on information that is widely available. This information does not, and is not intended to, constitute legal or financial advice. You should contact a professional for advice specific to your situation.