A Personal Example of Building and Using a Home Maintenance Savings Fund

Almost four years ago when I first purchased my condo coming in to graduate school, I discussed the various ways that I adjusted my monthly zero-based budget to take on the task of home ownership.

One of these ways was to set up an automatic monthly transfer from my checking to savings account for a set amount that would help me accumulate 1% of my home’s total market value over a 1 year time period. The idea for having this money on hand was to be able to pay for periodic maintenance that needed to be done on my property (without dipping in to an emergency fund or a credit card), since I no longer would have a landlord to call to take care of these items as they pop up. Thus began my home maintenance savings account. 

Why was 1% chosen as my target savings value? Since this was my first experience of home ownership, I took this recommended value from one of my favorite personal finance books, Personal Finance for Dummies by Eric Tyson. This value seemed appropriate since my condo was in pretty good shape when I purchased it. Of course, this value may need to be amended for your specific circumstances.


Slowly, Automatically Building a Home Maintenance Savings Fund

Having set up the automatic monthly transfer for my home maintenance fund, it took essentially no thought and no effort on my part to accumulate the money over the 1 year build-up period. The money was simply withdrawn automatically and immediately after I would get paid.

Before I knew it, a year had passed, and it was time to cancel the monthly recurring transfer since my maintenance fund was completed. On top of that, I had added several extra hundred Dollars for safe measure. Of course, if any maintenance expenditure were to arise, I would need to replenish the withdrawn fund from the account to keep the 1% home value target.


Electrical Problems

Having built up my home maintenance fund, I then waited for the first time I would need to tap in to it. And wait I did – for almost 3.5 years in fact!

From August 2010 – January 2013, I luckily did not have one significant maintenance problem that couldn’t be fixed with a little do-it-yourself caulking around the shower and kitchen sink piping.

However, that all changed last month when the electricity for an entire circuit breaker portion of our condo went out. At first, I just thought that the fuse in the circuit breaker had blown, and so I drove around town and after visiting 4 electrical supply stores, I procured a suitable replacement. However, that did not correct the problem.

Since I am by no means a qualified electrician, I decided it was time to call in a reputable professional. The way the billing is set up for the service we called was that it was $90 for the first 15 minutes, and then around $90 for each additional 30 minutes thereafter. Clearly, the most expensive part is simply getting them to show up for a visit.

After checking out the problem, the electrician found that the issue was rooted in the fact that our condo has aluminum wiring instead of the standard copper used nowadays, since our condo was built during a time when there was a copper shortage. Anyhow, he fixed what he thought was the problem, and everything seemed to be all right.

  • Total cost for first visit = $188. 

However, 2 hours after the electrician left, the electricity in the same area of the condo went out again because of a separate issue caused by the aluminum wiring causing an outlet in the guest bedroom to melt the plastic. Thus, we had to get the electrician back to the house a couple days later.

  • Total cost for second visit = $128.


Water Heater Problems (When It Rains, It Pours – Literally)

At almost the same time this electricity issue reared its ugly face, I had started to notice that the hot water would run out much quicker than it usually does while taking a shower. I figured this was simply a result of the water heater being old and there being record low temperatures in Virginia where I live in January.

After coming back in to town from a trip home to see my parents, I noticed that the problem still hadn’t corrected itself, despite being warmer outside. Thus, I finally decided to go out on my back porch and check the closet where the water heater is housed. Since the weather has been pretty terrible lately, my fiance and I had not been out on the porch for a couple weeks probably.

Much to my surprise, copious amounts of water were overflowing from the water heater and spilling out over the balcony to the patio below.

What this meant was that the water heater was continuously making hot water because it was leaking (never stopped because it could not fill itself up completely). Talk about a waste of resources/money/the environment!!!

Anyhow, we called up a plumber to assess the issue, and they quickly identified that the water heater had burst and needed to be replaced. They said that it was likely the original from when the condo was built 30+ years ago, so it definitely had some life to it!

Because the unit needed to be special ordered, he would have to come back the next day and install it.

  • Total cost for 3rd visit = $90.
  • Total cost for installed new water heater on 4th visit = $1090.


Total Repair Cost and Lessons Learned

So, altogether, the home maintenance repairs had costed me a total of $1,500, almost exactly the 1% of the purchase price of my condo, $105,000, plus the extra few hundred Dollars I had thrown in for safe measure. Pretty coincidental how that was exactly the amount of my home maintenance fund, eh!?

Overall, I feel pretty satisfied with how the repairs went. Furthermore, I feel fairly lucky that the damage caused by the melted plastic/aluminum wiring or the flood of dripping water did not cause anymore damage than to just the equipment described here. If my water heater had been in a more interior part of my house or in a finished basement, the water damage culminating from the 2 weeks it had been overflowing could have been extensive.

To this end, one lesson I learned through all of this is the importance of periodically (maybe 1x every 2 weeks) checking/visually surveying your house, specifically your heavy appliances such as furnace, water heater, A/C unit, etc for signs of malfunction. This is especially true for places (like my outdoor patio closet) where you don’t see on a typical day-to-day basis. 

How about you all? Do you have a home maintenance savings fund? If so, how much do you typically keep in it and why?

Share your experiences by commenting below!

***Photo courtesy of http://farm8.staticflickr.com/7277/7624022844_b08d0eaf71_o.jpg


  1. Honestly, we don’t have any home maintenance savings fund. I should start saving by next week definitely I will use this in the future.
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  2. Great post.
    I have a couple of thoughts. 1) having done a bit of do-it-yourself, i feel replacing a water heater is a viable candidate for such activity. It would have cost you just the price of the water heater – a few hundred dollars. Developing such skills, over time, will pay handsomely. Or, find a handy friend who will share time. I bet you have skills that would help them out. 2) now there is no money in the home repair account. As a home ages, it needs more help. I suggest that once the 1% goal is reached a smaller addition be made each month (1 12th of 1/2 percent?). This will give a cushion for just such a month as this and also fund eventual long term expensive repairs – like a new roof. Good job, keep going.

  3. Post script to my last comment. One way to develop do-it-yourself skills and to assure that you get what you pay for is to watch the repairman. Often you can pick up pointers. You also may be helpful, just handing wrenches etc.

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