One of the chief complaints I hear when families start tracking their expenses was that no month looks the same. That, and the word “budget” – which is why I excluded it from the title of this article! Over the next 4 weeks I will outline 4 of the common irregular expenses and how to plan for them.
It is very difficult to plan for all that life throws at you but that is no excuse for not planning ahead. When saving for these irregular expenses, it is helpful to track it, whether by hand or by using one of the popular online budgeting tools that allow for monthly “carryover.”
Home Maintenance –
How much to budget – While many suggest saving a percent of the home value, I have found that this is fairly irrelevant, especially if you live in a high cost of living area like Northern Virginia. I have found that saving approximately $1 per square foot per year is usually appropriate. For example, if you have a 2,400 square foot home, you should set aside $2,400/year or $200/month for home maintenance.
If you have an older home, you may want to build in a deferred maintenance budget of 1 year of expenses to start.
What is included – Repairs and replacement of appliances, self lawn care, roofing/siding, etc.
What is not – Discretionary costs like house cleaning, professional lawn care, remodeling, painting, etc.
Disclaimer: Alex Voorhees and Reston Wealth Management do not provide legal, accounting or tax advice. This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified investment, tax or legal advisor. All of these examples are estimates and should be taken as such. The opinions voiced in this article are for general information only and are not intended to provide specific advice or recommendations for any individual.