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How to Keep 3 Common Home Repairs From Busting Your Budget

If you’re in the market for a new home, you’ve probably dotted your i’s and crossed your t’s when it comes to gathering up cash to cover your down payment and adjusting your budget to account for a monthly mortgage payment.

But one aspect of home ownership that often falls through the financial cracks is the cost of maintenance and repair. Experts estimate that homeowners spend between 1–4% of their home’s value on maintenance and repair annually. For a $200,000 property, that translates into $2,000–8,000 on average every year.

Nothing cramps your homeowner style worse than an unexpected visit from Murphy. If it can go wrong, it will—and it always seems to come when you’re least prepared.

Let’s explore an example of three common Murphy visits and the one-two punch that can keep home repairs from busting your budget.

Murphy Visit #1: Busted Water Heater

Henry and Hattie Homeowner just bought a 10-year-old home with dreams of living happily ever after. But a month after moving in, the hot water heater bursts. According to, it’s right on schedule: The average life expectancy for a storage tank water heater is 10–15 years. Between their $1,000 homeowner’s insurance deductible, which covers the cost of clean-up, and the $1,200 they shell out to have a new water heater installed, this Murphy visit sets them back $2,200.

Thankfully, Henry and Hattie have plenty of emergency cash to foot the bill. That’s because they took Dave’s advice and waited until they were out of debt with three to six months of expenses stashed away before taking the leap into home ownership. Since this was an unexpected repair, there’s no need for them to feel guilty using their emergency fund to fund the fix. After all, that’s what it’s there for!

Murphy Visit #2: Leaky Roof

The water-heater incident was a wake-up call for the Homeowner family. They realize that big-ticket repairs will have a smaller impact on their emergency fund if they begin saving now. That’s where the sinking fund comes in.

A sinking fund may sound foreboding, but it’s actually a smart way to plan for the future. Simply save a small amount each month for a certain amount of time before making a purchase. Here’s how it works: Take the total estimated cost and divide it by the number of months you have left until payment is due. Add the result to your monthly budget.

The first place Henry and Hattie look is up. At 12 years old, their asphalt roof has a little less than a decade of life left. With a little research, they find that the average new roof costs $6,200–8,400, according to Home Advisor. They set their savings sights on $7,200 and give themselves eight years to get there. That means they’ll need to set aside $75 per month for 96 months.

Unfortunately, the roof springs a leak one year early. The good news is a roof contractor offers to replace it for just $6,800. The bad news is the Homeowners only have $6,300 saved in their sinking fund. But never fear! Their emergency fund comes to the rescue, enabling Henry and Hattie to knock out the remaining $500 without breaking a sweat.

Murphy Visit #3: A/C Blowout

After their hot water heater burst, Henry and Hattie also started stockpiling cash for another home repair heavy-hitter: their A/C unit.


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With so many moving parts, major components typically last anywhere from 10 to 25 years, according to a report by the International Association of Certified Home Inspectors (InterNACHI). Costs vary based on the size and sophistication of the unit, but This Old House estimates it would cost about $3,500–4,000 to replace an existing central air conditioning unit on a 2,000-square-foot home.

Since their home is 2,400 square feet, the Homeowners aim higher than the average. They settle on a $6,000 goal spread across five years, which comes out to $100 a month. This time, luck goes Henry and Hattie’s way. Their A/C unit holds on for another 10 years, giving them more than enough time to stockpile the cash needed to replace it without dipping into their emergency fund.

Harness the Power of a Pro

Want your home to be a blessing for many years to come? A healthy emergency fund is a great way to send Murphy packing. Shore up your defenses with a sinking fund for big repairs you know are coming down the pipeline.

Not sure where to begin? Hire a certified home inspector to perform a thorough inspection, and use the findings as a starting point to work future repairs into your budget. You’ll not only know what you’re getting into before you buy the home, you’ll also have a better sense of how much life major home components have left in them.

A good real estate agent can point you to a quality home inspector and help you find the right home at a price you can afford, today and tomorrow. If you’re looking for a real estate pro you can trust, we can introduce you to an agent in your area who’s earned Dave’s endorsement.

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Ramsey Solutions

About the author


Ramsey Solutions has been committed to helping people regain control of their money, build wealth, grow their leadership skills, and enhance their lives through personal development since 1992. Millions of people have used our financial advice through 22 books (including 12 national bestsellers) published by Ramsey Press, as well as two syndicated radio shows and 10 podcasts, which have over 17 million weekly listeners. Learn More.

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