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A lot of people use budgets for household expenses like groceries and utility bills and may even use a budget to save for a new car. Not as many, however, incorporate a budget for their home maintenance program. A budget for home maintenance gives you two things. It helps you better prepare for future upgrades or replacement of major equipment like furnaces, water heaters, humidifiers and so on but also gives you a trending on past costs for regular maintenance and repairs. Trending is important as it helps identify when it may be more economical to replace and upgrade equipment instead of repair. For example, you may have an older electric water heater chewing up massive amounts of electricity and burning out one heating element after another. It may be better to replace and upgrade to a natural gas tankless type (also see Something About Water Heaters). With a new unit you won’t have those same home maintenance repair costs to deal with and the savings from the more efficient and economical gas unit will give you a quick payback --- paying for itself. Nothing lasts for ever. All equipment has a useful life cycle. Knowing that your furnace has another 10 years left in its life cycle allows you to budget for the replacement cost and spread/budget that cost over the remaining ten years. Then, when it is time to replace your furnace, it won’t be an unforeseen surprise expense that you’re not prepared for. You’re not scrambling around to find the money. It’s already there; you’re prepared and saw it coming. No surprises! Here’s the best part! In the first part of the Home Maintenance Finance series we talked about a buffer. Well, the money you save up here for new equipment can also be used as your buffer. The chances that you will need to dip into your buffer money and replace equipment at the same time are slim enough that you can use the same money for both. Kind of like making the same buck appear in two places at the same time!
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