Whether you’re preparing to buy a new home or you’re a long-time homeowner, planning ahead is a great way to address home repairs. It can also help you keep unexpected expenses at bay and avoid unpleasant surprises.
This is especially important since home repair costs are on the rise. According to Angi’s recent “State of Home Spending” report, homeowners spent an average of $13,138 on home improvements in 2020, a significant uptick from 2019. To mitigate these costs it’s crucial to have a plan in place and budget accordingly.
Assess Any Needed Repairs
While some home fixes pop up unexpectedly, many have been brewing for a while, so it’s important to tackle these first whenever possible. If you’re just moving into a new home, work with your realtor to determine what repairs might be needed. These may include small changes such as new kitchen appliances or bigger structural repairs such as a new roof. Knowing what to expect ahead of time can help you prioritize necessary projects and give you time to budget for those that can wait.
If you’ve been in your home for a while, start by making a list of any known issues. This could be anything from a leaky faucet to a kitchen that’s no longer serving you. Having everything documented in one place will help you establish which repairs need to be addressed first and let you decide on the best way to finance them. If you’re looking to make more substantial upgrades, you may also find it helpful to get project estimates from a contractor.
Plan Out Your Budget
Once you’ve determined which projects you want to tackle, it’s time to think about your budget. If you’ve already got savings set aside, take stock of how much you have and what improvements they can cover.
A good rule of thumb is to set aside 1% of your home’s purchase price for annual maintenance. If you bought your home for $300,000, that means budgeting $3,000 per year for basic repairs. While this is a good starting point, it’s worth noting that the age of your home, your location, and the materials used to build it can add significantly to your annual costs. If you have an older home or live in a stormy climate, setting aside 3% of your home’s purchase price is often a better bet.
Consider A Personal Loan to Cover Additional Costs
Depending on the repairs you need to undertake, and your current budget, you may find that your savings aren’t quite enough to cover the expenses. If this is the case, a personal loan can be a great way to bridge the gap and provide additional funds. It’s worth noting, however, that not all personal loans offer the same benefits.
With a Discover® personal loan, you can borrow between $2,500 and $35,000 with no origination fees or closing fees. Plus, you’ll be able to choose a repayment term that works for you ranging from 36 to 84 months. Best of all, there are no fees of any kind as long as you make your payments on time and you can check your rate without any impact to your credit score.
Budgeting for necessary repairs can feel stressful, especially if there are other competing expenses. But preparing ahead of time can make a big difference and allow you to feel more in control of your home and your finances. By prioritizing necessary repairs, increasing your savings, and considering your financing options, you can make needed improvements without breaking the bank.