Author Topic: Budgeting home maintenance costs  (Read 3599 times)

bender

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Budgeting home maintenance costs
« on: August 01, 2017, 10:25:00 PM »
I'm trying to make a reasonable estimate for home maintenance for my FI budget. 

Here's the items I think will wear out long term:

ITEM - COST / YEARS = ANNUAL BUDGET
Roof - 10,000 / 20 = 500
Vinyl Siding - 12,000 / 30 = 400
Windows & Doors - (30x500 =15,000) / 25 = 600
Well - 2000 / 15 = 150
Septic maintenance - 300 / 3 = 100
Leach field replacement - 20,000 / 20 = 1000
Driveway - 10,000 / 20 = 500
Central air x2 - 5,000 / 20 = 250
Gas furnace - 2,500 / 25 = 100
Water heater - 1,000 / 10 = 100
Central vac - 1,500 / 20 = 75
Refinish hardwood floors 5000 / 15 = 333
Carpet replacement 3000 / 20 = 150

Appliances (pricey - this is comparable to current, but could be scaled back)
Fridge - 2,500 / 20 = 125
Stove - 2,000 / 20 = 100
Dishwasher - 1,000 / 20 = 50
Microwave - 500 / 20 = 25
Washer - 500 / 20 = 25
Dryer - 500 / 20 = 25

Total annual budget - $4,608 = $384 monthly.

Did I miss anything big, or are any of these estimates way off?  Some of the big items I've never replaced before, so just did a quick search.  I know every house is different and location makes a difference too.  I'm trying to ballpark it (on the conservative side) so it will be reflected in my FI number.  What amount do others use for this?
« Last Edit: August 03, 2017, 10:49:54 AM by bender »

GenXbiker

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Re: Budgeting home maintenance costs
« Reply #1 on: August 01, 2017, 10:38:34 PM »
You have some things on there that don't apply to me.  They seem reasonable.

I've spent a few thousand dollars in the last 20 years on tree services as well, such as spraying, trimming, and removal, so if you have any of those, especially large ones, that could be a factor.

bender

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Re: Budgeting home maintenance costs
« Reply #2 on: August 02, 2017, 02:52:56 PM »
Luckily I do my own tree maintenance, and they are far enough from hazards that it's usually simple.

I added a few more items - looking at this list makes me want to sell and go rent.  Not only is this stuff costly, but it's a pain dealing with it!  I'm not even budgeting for remodels like new kitchen cabinets.  We bought the house new 10 years ago and it's been good so far, but things are starting to break now.  I'm in repair mode as much as possible, but I know I'll have to replace these big items eventually.

GenXbiker

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Re: Budgeting home maintenance costs
« Reply #3 on: August 02, 2017, 08:09:49 PM »
Luckily I do my own tree maintenance, and they are far enough from hazards that it's usually simple.

I added a few more items - looking at this list makes me want to sell and go rent.  Not only is this stuff costly, but it's a pain dealing with it!  I'm not even budgeting for remodels like new kitchen cabinets.  We bought the house new 10 years ago and it's been good so far, but things are starting to break now.  I'm in repair mode as much as possible, but I know I'll have to replace these big items eventually.
I do some tree maintenance myself, but these large trees I had to pay to have taken down.  One of them had huge limbs directly over my house.

There's always something you never even think about happening.  I have  an underground electric feed coming into my house from the power company's meter.  I lost one leg of power and had to have that dug up and replaced to the tune of $800 several years ago.  That's something I could do myself, but due to work schedules, weather forecasts, working with the power company, inspectors, purchasing supplies, etc., I just paid to get it done quickly with minimal hassle.

Carpeting replacement, deck replacement, and plumbing replacement (have old copper pipes that have had some leaks) are other things on my list that aren't too far off.  I suppose you could add things like furniture on there if they aren't covered under another budget item.  Actually, as I think about these things, I probably should step up my home maintenance budget as well.  I've been in my current house for 15 years, and my budget has more than covered expenses to date, just as with my previous house for a number of years that I lived there, but I can see those expenses increasing in the years ahead.
« Last Edit: August 02, 2017, 08:11:43 PM by GenXbiker »

MrsWolfeRN

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Re: Budgeting home maintenance costs
« Reply #4 on: August 02, 2017, 08:42:58 PM »
Sounds reasonable, but the funds will be in your stache growing until you actually need them, rather than withdrawn each month like a utility bill,  so you may need less than you think. I am not sure how to calculate the difference.

bender

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Re: Budgeting home maintenance costs
« Reply #5 on: August 03, 2017, 10:57:23 AM »
Thanks for reminding me about carpets.  I added that as well. 

Interesting point on the possibility of needing less if the money is held in stocks.  If I've averaged it out to an annual expected cost, isn't it fairly accurate to use the 4% rule, just like any other expense?  Many of the high cost items have estimated lifespans, but could break down at any time.

Huskie87

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Re: Budgeting home maintenance costs
« Reply #6 on: August 03, 2017, 01:31:36 PM »
Wouldn't siding/roof most likely be covered by home insurance?

bender

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Re: Budgeting home maintenance costs
« Reply #7 on: August 03, 2017, 01:56:36 PM »
Wouldn't siding/roof most likely be covered by home insurance?

Not if it degrades naturally.  Siding will become brittle and crack at the end of it's life.  Asphalt shingles wear and granules start coming off in storms, eventually they will leak or fall off.  This is normal wear and not covered under any home insurance policies I know of.  Home insurance only covers accidental damage, hardly ever maintenance.

Huskie87

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Re: Budgeting home maintenance costs
« Reply #8 on: August 03, 2017, 02:01:45 PM »
Interesting.  I bought my first home a few years ago, and could never quite understand this topic.  I live in the midwest, and so my parents and family friends have told me they've never paid for a new roof, their insurance always covers the cost after a storm that brings hail.  I thought this couldn't be true, but have no experience to tell me otherwise.

v8rx7guy

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Re: Budgeting home maintenance costs
« Reply #9 on: August 03, 2017, 02:54:54 PM »
Driveway... replacement?  Not sure if I have ever seen anyone do that.  Excellent list though!

bender

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Re: Budgeting home maintenance costs
« Reply #10 on: August 03, 2017, 03:31:52 PM »
Driveway... replacement?  Not sure if I have ever seen anyone do that.  Excellent list though!

A properly installed driveway that is properly maintained may last 30+ years.  Unfortunately mine wasn't properly installed and it's significantly degraded in just 10 years.  I'm going to patch it for the next few years before I have to have it ripped out and redone.

Roots&Wings

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Re: Budgeting home maintenance costs
« Reply #11 on: August 03, 2017, 03:41:52 PM »
Do you have a garage? The openers/motors and doors may eventually need to be replaced. Painting, ceiling fans, light fixtures, toilets are the only other sorts of the things that come to mind for me not on your list, but, like windows/doors can potentially last much longer than anticipated service life and might be wants more than needs. If you're budgeting conservatively, may want to consider things like that.

Some on your list is completely optional (like central vac) and often older windows or water heaters still work fine. The septic drainfield at my house lasted for 60 years before I was lucky enough to have to replace it (during the home inspection), but also conservatively budgeting for a 20 year service life. Good list!

GenXbiker

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Re: Budgeting home maintenance costs
« Reply #12 on: August 03, 2017, 06:57:26 PM »
Thanks for reminding me about carpets.  I added that as well. 

Interesting point on the possibility of needing less if the money is held in stocks.  If I've averaged it out to an annual expected cost, isn't it fairly accurate to use the 4% rule, just like any other expense?  Many of the high cost items have estimated lifespans, but could break down at any time.
Yes, they could break down anytime.  So, in some cases, your stash could be less than what it would be based on the average, and in other cases, more, which will add or reduce the cost vs. the 4% you're already factoring in to your FIRE budget due to real returns.  I think it's best to just average it out over the long term based on the current cost, the 4% is already baked in, and don't adjust further.

Edited for additional clarity.
« Last Edit: August 03, 2017, 09:16:15 PM by GenXbiker »

Del Griffith

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Re: Budgeting home maintenance costs
« Reply #13 on: August 03, 2017, 07:50:17 PM »
Posting to follow. This list is a good basis for us to build ours off of.

Capt j-rod

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Re: Budgeting home maintenance costs
« Reply #14 on: August 03, 2017, 08:00:25 PM »
These costs are real and there needs to be something included in your expenses... That being said the money that you invest will gain interest as it sits waiting for the repair to be needed. This was mentioned in a different post. The hard part is when things break they always seem to all go to hell at once. I've done my furnace, A/C, hot water heater, Roof, and a new patio in the last 18 months. I did them all myself which saved a ton. I get to cheat because I do mechanical contracting for a living. I also got to buy dented equipment as it showed up at the supply house for a deep discount. I think your numbers are accurate, but I don't think you need 100% of the money all the time. If you kept 1/2 in an emergency fund you should be good to go.

Systems101

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Re: Budgeting home maintenance costs
« Reply #15 on: August 03, 2017, 09:05:17 PM »
Some of your lifespans are different than the averages.  Dishwasher stands out to me as one of the ones where the actual is in single digits, not 20 years.  Of course, some maintenance and better brands may make a bit of difference, but it all depends on how conservative you want to be.

This is a great resource:
http://www.atdhomeinspection.com/advice/average-product-life/

applegrapepie

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Re: Budgeting home maintenance costs
« Reply #16 on: August 04, 2017, 12:22:33 AM »
looks like it's a lot. Sure you have to invest on BTC then!

Bracken_Joy

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Re: Budgeting home maintenance costs
« Reply #17 on: August 12, 2017, 03:20:31 PM »
Love the breakdown. I was actually just googling for a list like this recently.

My only thoughts-
-leech field replacement every 20years? I feel like my folks had to do some maintenance, but never a replacement, and definitely not that high of a pricetag.
-contrary to the poster who has never seen a driveway replacement- my parents had to do that on one place we lived, but it was a good 40-50 year old driveway.
-carpet every 20 years seems optimistic. The house we bought has 10 year old carpet in the halls and living room. It was very high quality and good install when it went in (they saved all the receipts),  and it's looking pretty damn rough right now. Admittedly, from the halls it's clear that they wore shoes inside. I will say though, bedrooms are 21 year old carpet, and except for a little staining and being an old style, the carpets are totally fine. So depends on where they are, if you have pets, kids, etc. For our main areas, I'm mentally giving it 5 more years before we replace (have an old dog now, hope to have human poop machines children soon), then 10 years on the new carpet.

ETA: considering your relative budgets of carpet replacement vs hardwood refinish, I'm guessing you're wood most places other than bedrooms, so I rescind my former comment about carpet longevity =)
« Last Edit: August 12, 2017, 04:03:41 PM by Bracken_Joy »
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MrsPB

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Re: Budgeting home maintenance costs
« Reply #18 on: August 12, 2017, 04:00:41 PM »
This is a good list, our house is 20 yrs old, we've been in it almost 6 yrs and have done several of the large items on this list already (new roof/new furnace/new fridge/new dishwasher etc). We recently had a major dishwasher leak causing a couple thousand in basement repairs, plus a new dishwasher. Insurance deductible is $2k so factor in your insurance deductible to your monthly cost there!
Coming up in the next 3-5 yrs is carpets (luckily only in bedrooms), washer/dryer, septic field (urgh) and possibly driveway repaving. This doesn't include any upgrades we want to do like painting, kitchen cabinets, updating light fixtures etc.
We also have to stain our deck (500 sq feet) every few years and for a decent stain it costs several hundred $$ to do the job.
The husband is very handy so we can DIY almost all of this except the roof, but we've still spent a LOT on essential maintenance.

Have you accounted for annual furnace maintenance and such?
 

MrsPB

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Re: Budgeting home maintenance costs
« Reply #19 on: August 12, 2017, 04:04:58 PM »
And +1 to the shorter lifespan for dishwashers. As we just replaced ours as it leaked all down through our basement causing quite a bit of damage, my reading indicated 8-10 yrs is more the norm. Our was in that range and we had done several repairs on it in the last 2 yrs also.

GenXbiker

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Re: Budgeting home maintenance costs
« Reply #20 on: August 12, 2017, 04:39:53 PM »
Here are some mentioned in another thread - not all of them have been mentioned here.  So we might be talking $500/mo over the long haul.  That's quite a bit more than I've been budgeting, but I've been under budget to this point at 15 years in my current home.  Eventually, the chickens will come home to roost, so I'm upping my budget some as I noted earlier.

I think many are skipping rare large expenses.
Sure they can be ammortized over many years, but they need to be
added into the yearly expenses.
New Roof (25yr), new carpet (20yr) new water heater (18yr)
Furnace, air conditioner, remodel bath, kitchen, furniture,
new lawnmower, sprinkler system, TV replacement, matress,
dishwasher, washer/dryer wooden fence replacement Auto replacement, etc.

 I haven't calculated but these could add $200 to $500 a month.
« Last Edit: August 12, 2017, 04:47:33 PM by GenXbiker »

marcusj82

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Re: Budgeting home maintenance costs
« Reply #21 on: August 12, 2017, 06:34:15 PM »
Maybe not relevant to your situation, but in our area, many older houses have clay sewage pipes.  We were told these were essentially ticking time bombs and we could expect to pay ~$5,000 when it finally fails.   

frugalcanuck

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Re: Budgeting home maintenance costs
« Reply #22 on: August 13, 2017, 07:46:48 AM »
I remember listening to a CBC radio show where they had an old appliance repair man as a guest.  He explained that in the 1960's many of the household appliances were "over engineered" and were not breaking down when they were expected to.  The manufacturers got wise to it and started engineering their items to break down at certain ages.  This guy was explaining that throughout the 80's and 90's he was able to know what the problem was as soon as he found out the model. 
My parents had the same washer and dryer from 1980 to 2002.  Since they "upgraded," they have needed replacing every 6 years.

jlcnuke

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Re: Budgeting home maintenance costs
« Reply #23 on: August 13, 2017, 09:35:20 AM »
I'm trying to make a reasonable estimate for home maintenance for my FI budget. 

Here's the items I think will wear out long term:

ITEM - COST / YEARS = ANNUAL BUDGET
Roof - 10,000 / 20 = 500 I'd estimate that about 1 out of every 50-100 roof replacements cost the owner more than the insurance deductible, so this is likely way over actual cost to you
Vinyl Siding - 12,000 / 30 = 400
Windows & Doors - (30x500 =15,000) / 25 = 600 color=red]I'd be very very surprised if you needed to replace every window and door within 25 years. Windows are generally replaced due to breakage or "desire" by the 25th year, but not out of necessity[/color]
Well - 2000 / 15 = 150 color=red]while well pumps (like more pumps) are only "rated" for ~12-15 years, you're more likely to get 30 years out of them than 12[/color]
Septic maintenance - 300 / 3 = 100 color=red]This price likely varies from area to area. It's a bit more expensive for me, and this wouldn't quite cost my average pumping costs (large tank)
 and definitely doesn't include the costs of treatments[/color]
Leach field replacement - 20,000 / 20 = 1000
Driveway - 10,000 / 20 = 500 color=red]already addressed by others, once you fix it once then it should last longer than you're likely to have the house however[/color]
Central air x2 - 5,000 / 20 = 250
Gas furnace - 2,500 / 25 = 100
Water heater - 1,000 / 10 = 100 color=red]A standard 40 gallon furnace replacement will run ~$700 here and should last you "at least" 10 years, but more likely 15-20 as long as you make sure to properly maintain it[/color]
Central vac - 1,500 / 20 = 75 color=red]optional, I'd go with buying a $200 vacuum every 15 years instead myself...[/color]
Refinish hardwood floors 5000 / 15 = 333
Carpet replacement 3000 / 20 = 150

Appliances (pricey - this is comparable to current, but could be scaled back) color=red]yep, these are pricey[/color]
Fridge - 2,500 / 20 = 125
Stove - 2,000 / 20 = 100
Dishwasher - 1,000 / 20 = 50
Microwave - 500 / 20 = 25
Washer - 500 / 20 = 25
Dryer - 500 / 20 = 25

Total annual budget - $4,608 = $384 monthly.

Did I miss anything big, or are any of these estimates way off?  Some of the big items I've never replaced before, so just did a quick search.  I know every house is different and location makes a difference too.  I'm trying to ballpark it (on the conservative side) so it will be reflected in my FI number.  What amount do others use for this?

The other thing I'd mention is - what of these are accounted for in your emergency fund? For me, pretty much all of this is covered by my "shit, that broke" part of my emergency fund. The point of my emergency fund is to tide me over in the event of a job loss (unlikely once I'm in retirement when I'd expect most of this stuff to come up ;)) OR to take care of the "very infrequent" or "unexpected" expenses; including HVAC breaks, need to pay insurance deductible, etc. Since they're already budgeted for there, simply keeping my emergency fund in the range I'm comfortable with should be more than adequate to take care of any reasonable expenses like these as they come up so I wouldn't try and make them a separate part of the budget.
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Roots&Wings

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Re: Budgeting home maintenance costs
« Reply #24 on: August 13, 2017, 09:40:02 AM »
-leech field replacement every 20years? I feel like my folks had to do some maintenance, but never a replacement, and definitely not that high of a pricetag.

Yes, 20 years is a generally accepted rule of thumb for septic drain fields, though some last much longer. When mine was replaced a year ago, the cost was $2.8k, but if you have a fancy mound system/complex drainage issues, then the cost can skyrocket quickly.

Can also vouch for the washer/dryer cost, though service life at 20 yrs might be a bit long. Mine just went (11 yrs old), and $1k replacement cost (dryer of course is an optional want).

lbmustache

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Re: Budgeting home maintenance costs
« Reply #25 on: August 13, 2017, 10:40:46 AM »
I'm trying to make a reasonable estimate for home maintenance for my FI budget. 

Appliances (pricey - this is comparable to current, but could be scaled back)
Fridge - 2,500 / 20 = 125
Stove - 2,000 / 20 = 100
Dishwasher - 1,000 / 20 = 50
Microwave - 500 / 20 = 25
Washer - 500 / 20 = 25
Dryer - 500 / 20 = 25

Did I miss anything big, or are any of these estimates way off?  Some of the big items I've never replaced before, so just did a quick search.  I know every house is different and location makes a difference too.  I'm trying to ballpark it (on the conservative side) so it will be reflected in my FI number.  What amount do others use for this?

I do think some of these are a little off - a fridge that's $2500 will be a very fancy fridge:

This fancy fridge comes in at about that price for non-Costco members: https://m.costco.com/LG-30CuFt-Super-Capacity-3-Door-French-Door-Stainless-Steel-Refrigerator-with-Door-in-Door.product.100146696.html

This is a MORE than decent fridge, and is about $1k: https://m.costco.com/GE-25.4-CuFt-Side-By-Side-Refrigerator-in-Slate.product.100350340.html

Same with the stove. A $2500 stove is going to be like, an ultra fancy professional level stove. FWIW I got a great (gas) stove for approx $700, 5 burners, edge-to-edge cooktop, convection oven, all the bells and whistles.

Microwave is also a bit expensive - normally the over-the-counter ones are expensive and around $300-$350, but I have NEVER had a microwave last for more than 5 years or so. I think the longest was 7. 20 years is really optimistic to me.

GenXbiker

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Re: Budgeting home maintenance costs
« Reply #26 on: August 13, 2017, 10:54:48 AM »
I'm trying to make a reasonable estimate for home maintenance for my FI budget. 

Appliances (pricey - this is comparable to current, but could be scaled back)
Fridge - 2,500 / 20 = 125
Stove - 2,000 / 20 = 100
Dishwasher - 1,000 / 20 = 50
Microwave - 500 / 20 = 25
Washer - 500 / 20 = 25
Dryer - 500 / 20 = 25

Did I miss anything big, or are any of these estimates way off?  Some of the big items I've never replaced before, so just did a quick search.  I know every house is different and location makes a difference too.  I'm trying to ballpark it (on the conservative side) so it will be reflected in my FI number.  What amount do others use for this?

I do think some of these are a little off - a fridge that's $2500 will be a very fancy fridge:

Same with the stove. A $2500 stove is going to be like, an ultra fancy professional level stove. FWIW I got a great (gas) stove for approx $700, 5 burners, edge-to-edge cooktop, convection oven, all the bells and whistles.

Microwave is also a bit expensive - normally the over-the-counter ones are expensive and around $300-$350, but I have NEVER had a microwave last for more than 5 years or so. I think the longest was 7. 20 years is really optimistic to me.

He specifically said, "Appliances (pricey - this is comparable to current, but could be scaled back)."

My microwave is used frequently and is just over 25 years old.  The longevity of these items is going to vary from one person to the next, even if they have the exact same model, so you just need to come up with your best estimation.

GenXbiker

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Re: Budgeting home maintenance costs
« Reply #27 on: August 13, 2017, 11:22:33 AM »
The other thing I'd mention is - what of these are accounted for in your emergency fund? For me, pretty much all of this is covered by my "shit, that broke" part of my emergency fund. The point of my emergency fund is to tide me over in the event of a job loss (unlikely once I'm in retirement when I'd expect most of this stuff to come up ;)) OR to take care of the "very infrequent" or "unexpected" expenses; including HVAC breaks, need to pay insurance deductible, etc. Since they're already budgeted for there, simply keeping my emergency fund in the range I'm comfortable with should be more than adequate to take care of any reasonable expenses like these as they come up so I wouldn't try and make them a separate part of the budget.
I disagree.  That would be rationalizing away real costs as to justify needing a smaller stache.  These are expected expenses that you are going to face over time, and even though you could pay for them from your emergency fund, you will want to replenish the fund without touching your stache, and having a specified amount in the monthly budget will allow for that.  You are fooling yourself if you don't think these are real expenses that need to be accounted for over time.  If many years down the road, your stache happens to grow beyond 25x expenses to allow you to withdraw larger chunks for big ticket items, that's great, but you can't predict the future, so you need to budget for these expenses, unless perhaps you already have a huge stache well in excess of 25x expenses, but even then, I would recommend adding it to your monthly budget just for proper tracking, if nothing else.  For those on a more strict and common 25x 4%WR goal, it's more critical to account for this as a budget item, or you will be in for a unpleasant surprise later when additional bills stack up.  I'm actually increasing my budgeted amount despite having stayed under my budgeted figure for 25 years because I know the chickens will come home to roost, with a few things coming up more near term.

Insurance companies are tightening up on roof replacement coverage, such as requiring inspections and such, which will likely only increase going forward, so don't expect to get a free (deductible) ride in the long term due to storm damage.  Play it safe and keep it in the budget.

http://www.insurance.com/home-and-renters-insurance/coverage/have-a-20-year-old-roof-you-may-lose-your-homeowners-insurance.html

Another item which should be added to the budget on top of everything here is your deductible amount, at least for a one time use.  That way, if you ever need to use your homeowner's insurance, you've accounted for the deductible in your budget.  So, if your deductible is $2000, just add that to the long list of items in the first post (as well as those mentioned later in this thread.)

If in doubt, putting $400/mo into the budget will probably cover most maintenance over the long haul for most homeowners.

jlcnuke

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Re: Budgeting home maintenance costs
« Reply #28 on: August 13, 2017, 11:30:17 AM »
The other thing I'd mention is - what of these are accounted for in your emergency fund? For me, pretty much all of this is covered by my "shit, that broke" part of my emergency fund. The point of my emergency fund is to tide me over in the event of a job loss (unlikely once I'm in retirement when I'd expect most of this stuff to come up ;)) OR to take care of the "very infrequent" or "unexpected" expenses; including HVAC breaks, need to pay insurance deductible, etc. Since they're already budgeted for there, simply keeping my emergency fund in the range I'm comfortable with should be more than adequate to take care of any reasonable expenses like these as they come up so I wouldn't try and make them a separate part of the budget.

I disagree.  That would be rationalizing away real costs as to justify needing a smaller stache.  These are expected expenses that you are going to face over time, and even though you could pay for them from your emergency fund, you will want to replenish the fund without touching your stache, and having a specified amount in the monthly budget will allow for that.  You are fooling yourself if you don't think these are real expenses that need to be accounted for over time.  If many years down the road, your stache happens to grow beyond 25x expenses to allow you to withdraw larger chunks for big ticket items, that's great, but you can't predict the future, so you need to budget for these expenses, unless perhaps you already have a huge stache well in excess of 25x expenses, but even then, I would recommend adding it to your monthly budget just for proper tracking, if nothing else.  For those on a more strict and common 25x 4%WR goal, it's more critical to account for this as a budget item, or you will be in for a unpleasant surprise later when additional bills stack up.  I'm actually increasing my budgeted amount despite having stayed under my budgeted figure for 25 years because I know the chickens will come home to roost, with a few things coming up more near term.

Insurance companies are tightening up on roof replacement coverage, such as requiring inspections and such, which will likely only increase going forward, so don't expect to get a free (deductible) ride in the long term due to storm damage.  Play it safe and keep it in the budget.

http://www.insurance.com/home-and-renters-insurance/coverage/have-a-20-year-old-roof-you-may-lose-your-homeowners-insurance.html

Another item which should be added to the budget on top of everything here is your deductible amount, at least for a one time use.  That way, if you ever need to use your homeowner's insurance, you've accounted for the deductible in your budget.  So, if your deductible is $2000, just add that to the long list of items in the first post (as well as those mentioned later in this thread.)

If in doubt, putting $400/mo into the budget will probably cover most maintenance over the long haul for most homeowners.

So, your emergency fund isn't to cover deductibles in the case of an emergency that causes you to use your insurance policies, or for emergencies when something on your house breaks/needs replacing, etc....

So why would you even bother with an emergency fund in retirement if you're adequately insured then?? I can EITHER budget for "paying for emergencies" (such as a broken roof, or non-functioning HVAC, or a fridge that stops working) in my emergency fund OR I can have some hypothetical "pool" that keeps money building up to pay for such things... just like my emergency fund...

Things I've unexpectedly replaced in the past 5 years:
1. Furnace
2. A/C unit
3. Hot water heater.
4. Stove

Things that weren't covered by my emergency fund budget in the past 5 years:
Nothing, because that's what my emergency fund is for.

What's your emergency fund for in retirement? An emergency vacation??
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jlcnuke

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Re: Budgeting home maintenance costs
« Reply #29 on: August 13, 2017, 11:36:23 AM »
Put another way:
The listed items are going to break unexpectedly and incur costs that must be paid or significant disturbances to your life will result... a kind of emergency
Except for the items that are "Regular maintenance" items (i.e. septic pumping).

Both "emergency" funds and "regular home maintenance" stuff SHOULD already be budget items already. As such, budgeting for each individual thing makes about as much sense to me as having separate line items on your budget for salt, sugar, flour, tortillas, pickles, ketchup, deli ham, etc...
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tthree

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Re: Budgeting home maintenance costs
« Reply #30 on: August 13, 2017, 02:40:14 PM »
Do you have a deck?  If so, add that to your list.

ETA: fence.
« Last Edit: August 13, 2017, 02:41:46 PM by tthree »

GenXbiker

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Re: Budgeting home maintenance costs
« Reply #31 on: August 14, 2017, 02:30:09 PM »
Put another way:
The listed items are going to break unexpectedly and incur costs that must be paid or significant disturbances to your life will result... a kind of emergency
Except for the items that are "Regular maintenance" items (i.e. septic pumping).

Both "emergency" funds and "regular home maintenance" stuff SHOULD already be budget items already.

OK, it looks like we misunderstood each other.  I use the term "emergency fund" in the classical sense as to refer to the cash that isn't invested that is available for immediate access when unexpectedly needed.  "Emergency fund" is not a budget item for me, so anything that is paid for via the emergency fund still has to be on my monthly budget.  When you said most of those items were budgeted in the emergency fund, I assumed you meant that they weren't accounted for at all (even indirectly) as a monthly expense, which is why I said that you were rationalizing away expenses to get your target number down for a lower 4% SWR and earlier FIRE.  But since "emergency fund" is a budget item for you and includes those same expenses, then yes, that accomplishes the same thing as a separate "home maintenance" item does for someone else.

I was curious if maybe this has come up before about the emergency fund being a budget item, so I just looked over several threads discussing emergency funds and found no reference to anyone adding it as a budget item until I got to this one:

https://forum.mrmoneymustache.com/ask-a-mustachian/what-non-monthly-things-to-you-budget-for/

Only the last two people posting there listed "emergency fund" as a separate budget item, but one specifically added "currently funded" as if it had reached a minimum threshold and that he was no longer budgeting additional funds for it.   So, it looks to me as if most people don't have emergency fund as an ongoing budget item to amortize the expense over the long haul, which is how I was understanding your position.  Since you have it as a budget item, that is different, and seems like an acceptable alternative.

Quote
As such, budgeting for each individual thing makes about as much sense to me as having separate line items on your budget for salt, sugar, flour, tortillas, pickles, ketchup, deli ham, etc...

I didn't mean that anyone should have each of those items listed separately in a budget.  I meant that the total cost of those maintenance items should be "accounted for" in your budget under the relevant line item (e.g.  the $400/mo home maintenance).  I have the single home maintenance line item in my budget, that I mentioned increasing earlier in the thread.  A breakdown can be documented elsewhere without cluttering up the budget with all the finer details of what makes up that budget item.  If emergency fund is a budget line item and includes some of those expenses, that accomplishes the same thing.
« Last Edit: August 14, 2017, 02:44:25 PM by GenXbiker »

jlcnuke

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Re: Budgeting home maintenance costs
« Reply #32 on: August 14, 2017, 02:52:14 PM »
Put another way:
The listed items are going to break unexpectedly and incur costs that must be paid or significant disturbances to your life will result... a kind of emergency
Except for the items that are "Regular maintenance" items (i.e. septic pumping).

Both "emergency" funds and "regular home maintenance" stuff SHOULD already be budget items already.

OK, it looks like we misunderstood each other.  I use the term "emergency fund" in the classical sense as to refer to the cash that isn't invested that is available for immediate access when unexpectedly needed.  "Emergency fund" is not a budget item for me, so anything that is paid for via the emergency fund still has to be on my monthly budget.  When you said most of those items were budgeted in the emergency fund, I assumed you meant that they weren't accounted for at all (even indirectly) as a monthly expense, which is why I said that you were rationalizing away expenses to get your target number down for a lower 4% SWR and earlier FIRE.  But since "emergency fund" is a budget item for you and includes those same expenses, then yes, that accomplishes the same thing as a separate "home maintenance" item does for someone else.

I was curious if maybe this has some up before about the emergency fund being a budget item, so I just looked over several threads discussing emergency funds and found no reference to anyone adding it as a budget item until I got to this one:

https://forum.mrmoneymustache.com/ask-a-mustachian/what-non-monthly-things-to-you-budget-for/

Only the last two people posting there listed "emergency fund" as a separate budget item, but one specifically added "currently funded" as if it had reached a minimum threshold and that he was no longer budgeting additional funds for it.   So, it looks to me as if most people don't have emergency fund as an ongoing budget item to amortize the expense over the long haul, which is how I was understanding your position.  Since you have it as a budget item, that is different, and seems like an acceptable alternative.

Quote
As such, budgeting for each individual thing makes about as much sense to me as having separate line items on your budget for salt, sugar, flour, tortillas, pickles, ketchup, deli ham, etc...

I didn't mean that anyone should have each of those items listed separately in a budget.  I meant that the total cost of those maintenance items should be "accounted for" in your budget under the relevant line item (e.g.  the $400/mo home maintenance).  I have the single home maintenance line item in my budget, that I mentioned increasing earlier in the thread.  A breakdown can be documented elsewhere without cluttering up the budget with all the finer details of what makes up that budget item.  If emergency fund is a budget line item and includes some of those expenses, that accomplishes the same thing.

No, we understood each other, we just deal with this stuff very differently apparently. My emergency fund will fund an emergency (the roof is leaking and needs to get fixed now), then I take money from my discretionary spending and replenish it (if needed, not retiring with the "bare minimum to get my withdrawal rate" will hopefully mean I'll always have a much larger cushion that needed and such emergencies will be minor annoyances at worst). As I don't know if I'll need $1k to cover repairing a roof leak tomorrow, 10 years from now, 30 years from now, or "not in my lifetime", it makes more sense to me to maintain a fund to cover unexpected expenses/emergencies and replenish it when it's used than to set money aside continually for something I may never even need to spend money on. If you would rather never reduce your discretionary/fun spending temporarily (if at all depending on stash/WR at the time), and would prefer to reduce it permanently to continually fund expenses that while "likely" are of an "unknowable cost (who knows what prices of things may be 20, 30, + years from now) and to be spent at an unknowable time (who knows when that window will need replaced etc)", that's another way to fund such costs. It's just not how I'd prefer to do so. To each their own. I just wanted to give my opinion on how to handle such things. It's only one opinion and not any more valid than any other opinion on the subject.
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GenXbiker

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Re: Budgeting home maintenance costs
« Reply #33 on: August 14, 2017, 07:07:46 PM »
Put another way:
The listed items are going to break unexpectedly and incur costs that must be paid or significant disturbances to your life will result... a kind of emergency
Except for the items that are "Regular maintenance" items (i.e. septic pumping).

Both "emergency" funds and "regular home maintenance" stuff SHOULD already be budget items already.

OK, it looks like we misunderstood each other.  I use the term "emergency fund" in the classical sense as to refer to the cash that isn't invested that is available for immediate access when unexpectedly needed.  "Emergency fund" is not a budget item for me, so anything that is paid for via the emergency fund still has to be on my monthly budget.  When you said most of those items were budgeted in the emergency fund, I assumed you meant that they weren't accounted for at all (even indirectly) as a monthly expense, which is why I said that you were rationalizing away expenses to get your target number down for a lower 4% SWR and earlier FIRE.  But since "emergency fund" is a budget item for you and includes those same expenses, then yes, that accomplishes the same thing as a separate "home maintenance" item does for someone else.

I was curious if maybe this has some up before about the emergency fund being a budget item, so I just looked over several threads discussing emergency funds and found no reference to anyone adding it as a budget item until I got to this one:

https://forum.mrmoneymustache.com/ask-a-mustachian/what-non-monthly-things-to-you-budget-for/

Only the last two people posting there listed "emergency fund" as a separate budget item, but one specifically added "currently funded" as if it had reached a minimum threshold and that he was no longer budgeting additional funds for it.   So, it looks to me as if most people don't have emergency fund as an ongoing budget item to amortize the expense over the long haul, which is how I was understanding your position.  Since you have it as a budget item, that is different, and seems like an acceptable alternative.

Quote
As such, budgeting for each individual thing makes about as much sense to me as having separate line items on your budget for salt, sugar, flour, tortillas, pickles, ketchup, deli ham, etc...

I didn't mean that anyone should have each of those items listed separately in a budget.  I meant that the total cost of those maintenance items should be "accounted for" in your budget under the relevant line item (e.g.  the $400/mo home maintenance).  I have the single home maintenance line item in my budget, that I mentioned increasing earlier in the thread.  A breakdown can be documented elsewhere without cluttering up the budget with all the finer details of what makes up that budget item.  If emergency fund is a budget line item and includes some of those expenses, that accomplishes the same thing.

No, we understood each other, we just deal with this stuff very differently apparently.

No, we actually did NOT understand each other, but it was an even bigger misunderstanding than I originally thought.  Even in my last post I kept mentioning your emergency fund budget item since you had previously posted, "Both "emergency" funds and "regular home maintenance" stuff SHOULD already be budget items," and, "I can EITHER budget for 'paying for emergencies.'"  But now, I am to understand that you don't actually have an emergency fund budget item after-all because you now have said this instead:

Quote
My emergency fund will fund an emergency <snip>, then I take money from my discretionary spending and replenish it

OK, that's different, you are using your discretionary spending budget to fund your emergency fund and pay your home maintenance from that.  On your budget, those expenses are essentially hidden within your discretionary budget item.  So this is now my third understanding of how you are handling it as you have posted these new details in follow-up posts that I would never have assumed based on the previous posts.  So hopefully that is the correct understanding finally.  With that, it turns out that your emergency fund is of the classical sense, just like mine, not a line item on your budget as I misunderstood in my last post.  The difference from me is in how you fund it.

Quote
it makes more sense to me to maintain a fund to cover unexpected expenses/emergencies and replenish it when it's used than to set money aside continually for something I may never even need to spend money on.

I guess my experience in accounting and budgeting helps me out here.  I've been budgeting like this for 25 years, and I realize that money doesn't have to be physically "set aside".  All that matters is that these expenses are accounted for and can be paid for over the long term while keeping my total stache at a level to sustain a 4% WR (of initial balance plus increased for inflation each year).  If you're owning a home long term, you can pretty much count on all/most of these over the long haul, some may end up being less, some may be more, but I prefer having my best estimate in a comprehensive maintenance budget item rather than taking those funds from a completely unrelated budget item on as as-needed basis.

Quote
If you would rather never reduce your discretionary/fun spending temporarily (if at all depending on stash/WR at the time),

What I want is to keep the certainty of significant maintenance costs out of my discretionary spending budget line item, where it doesn't belong IMHO.  I don't consider home maintenance and emergencies to be discretionary since they are required.  And I don't want my discretionary budget item to be over-inflated due to it being used as a replenishing source for emergencies/maintenance.  I also don't want to make the mistake of over-spending money as "discretionary" that could come back to bite me down the road because I used it as "fun" money when I should have been accounting for inevitable expenses down the road that would require me to back off on true discretionary spending in order to replenish the emergency fund rather than if those expenses were being accounted for each month separately from discretionary, as I am doing.

Quote
and would prefer to reduce it permanently to continually fund expenses that while "likely" are of an "unknowable cost (who knows what prices of things may be 20, 30, + years from now) and to be spent at an unknowable time (who knows when that window will need replaced etc)",

As for future pricing, 4% plus increased for inflation each year accounts for price changes.  Most things don't increase in price lock-step with CPI, and that goes for your entire budget.  But by using inflation adjusted withdrawals, you are accounting for those increases in cost in a practical way.  You're never going to get budgets to the exact dollar for home maintenance or anything else that changes monthly or yearly.  That doesn't mean you should remove all those things as budget items and try to cover them under discretionary spending.  It's no different with maintenance to me.  It just makes more sense to me to account for those expenses as maintenance instead of as part of discretionary spending.

Quote
To each their own. I just wanted to give my opinion on how to handle such things. It's only one opinion and not any more valid than any other opinion on the subject.

I am not saying your opinion is wrong, although the OP would still need to account for those expenses somewhere, whether it was though a maintenance budget like me or through "additional" discretionary spending like you.  I only disagreed with you originally because I completely misunderstood you.  As it turns out, I still misunderstood you during my last post, but I think we got that cleared up now, and I finally understand how you're handling it.  In a nutshell, it looks like we're not doing it all that differently.  We both have emergency funds, and we are funding it to pay for these large maintenance expenses when they come up, but your emergency fund is replenished by your discretionary spending budget item which may cause you to reduce "fun" activities at times during fund replenishment while my emergency fund is funded by my maintenance line item, so my discretionary budget item remained unchanged.  At the end of the day, we are both covering those expenses in a monthly expense item, which I didn't think you were doing after your very first post.  We're replenishing from "different" expense items, but that's six one way, half a dozen the other.  The dollars are still budgeted for one way or the other.

I should add that my discretionary spending line item is whatever is left over after expenses, and I don't normally spend most of it, but I actually save most of it.  In fact, I saved over 90% of it in 2016, which is why I had an 80% to 83% savings rate last year (depending on method of calculation as posted in another thread.)  But I certainly don't use that part of my budget for home maintenance, nor use it for groceries, or anything else that I have a budget item for.  I want those things to be accounted for in the budget rather than hidden within my discretionary spending.  But if that works for you, that is great.  The end dollars will still work out.  I am not trying to talk you out of it, only explain what I misunderstood about your method originally and why I prefer my way, which I've now been doing for 25 years.  Good luck and thanks for sharing your method.  Some people may prefer your way, and that's fair.  And then there are people that do it differently from both of us, such as a couple people in the thread that I linked to earlier who actually had an emergency fund monthly expense budget item to replenish their emergency funds.  That's fair also.
« Last Edit: August 14, 2017, 07:22:27 PM by GenXbiker »

Laura33

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Re: Budgeting home maintenance costs
« Reply #34 on: August 15, 2017, 07:30:01 AM »
The only thing I would add would be to refine your list once you have identified the house.  E.g., our house came with cheap vinyl windows that, even only @15 years later, were ridiculously underperforming (we did the 3M window film, and you could literally see the wind billowing it).  So we knew going in that that would be a big replacement.  But we also had unusually-sized windows, and we upgraded the quality in the hope that they'd last longer than the prior version and perform better, so our cost was closer to $1K/window (big yikes there).  The doors, OTOH, are solid wood and will basically never need replacing; we just need to refinish the front door about every 10 years to manage sun damage.

Similarly, the roof life will be very different depending on whether it's the cheapest asphalt vs. "architectural"-grade asphalt vs. cedar shakes vs. tile or slate -- and based on whether it is installed and vented properly. 

I do agree that the carpet frequency is insufficient, given my experience; OTOH, you may not ever have to refinish hardwoods before you sell. 
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bender

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Re: Budgeting home maintenance costs
« Reply #35 on: August 19, 2017, 08:51:59 AM »
I'll chime in on the emergency fund discussion.  The budget is part of my FI budget, which will be entirely supported by my stache.  So this budget is helping determine the required size of the stache to be FI.  I definitely want to budget for these items as I want an accurate representation of what my actual spending will be over time.  I also don't want to fool myself into thinking owning my home is cheap.  I don't consider items like a new leach field or roof an emergency, but they are infrequent large expenses that must be budgeted for.  It's not certain how long the items will last, so using averages seems to be a good method.

I plan to liquidate a certain amount of investments annually (or quarterly/monthly) to cover living expenses.  I also plan to have a certain amount of cash as buffer, maybe 6 months to a year of expenses.

For example, using very rough numbers: 
If spending is 120k annually, 10k in stock would be sold monthly and deposited in the cash spending account.  I'd probably keep about 50k as a base amount in this account to maintain a buffer that would cover rare expenses.  In case $10k is spent on a new roof, maybe I'd increase stock sales by 1k per month until the buffer is replenished to the $50k base.  I guess by some definitions this is an emergency fund, I just call it by a different name - buffer.

Emergencies are unplanned for.  The more accurate and real the budget is, the fewer emergencies we need to deal with.  One emergency I don't budget for is car accidents.  I carry liability, but self-insure the comprehensive part.  So if I cause an accident that totals my car, I'm on the hook to buy myself a new car.  Since I only budget for a new car every 10+ years, this would be an emergency expenditure.  In an emergency like this, I'd have to take the money out of my buffer (aka emergency fund), and replenish it somehow.  I'd try to make any emergency spending budget neutral by reducing discretionary spending (like vacations and eating out) over a long enough period so my overall spending remained at the right level (unless of course the stache is growing out of control and we can be a little lax here).