When you become a homeowner, it's crucial to anticipate the various expenses that come with the territory. The financial journey doesn't end with the purchase of your home. You need to be prepared for the ongoing upkeep and maintenance required to preserve and enhance your property. This foresight is key to avoiding financial stress when unexpected repairs arise.

Having a plan for these unexpected expenses can provide a sense of security and preparedness, relieving the potential shock of unforeseen repairs.

By implementing a solid financial plan, you can take control of your home's maintenance costs, allowing you to live in the house of your dreams without the fear of it crumbling around you.

One way to afford these costs is to create sinking funds. Unlike emergency funds, sinking funds are dedicated savings for one sole purpose that provide a sense of reassurance, knowing you have the means to handle certain home concerns without financial stress.

You can and should have multiple sinking funds dedicated to different things in your life and your home to help you spread the bills or expenses incurred outside your standard outgoings. Doing this can help you avoid relying on credit or reduce the amount you need to borrow if you haven't quite accumulated enough funds yet, especially for significant work around the house.

This post is going to look at a few of the different types of home maintenance sinking funds you should have.

While experts suggest you should aim to put away 1% of your home value each year, let's say your home is worth $300,000; then you need to put away $3,000 a year for repairs and maintenance, more for costly work such as renovations. Over a year, this equates to $250 a month, which, while still a lot to put away, is more manageable than finding $3,000 out of nowhere.

But when it comes to separate funds, not one giant pot to dip into, you need to be more exact and careful with how much you are saving and is assigned to each fund.

Roof Repairs

Roofs need to be replaced on average every 15 years. This can be shorter or longer depending on the upkeep and care they have received, the weather in the local area, the construction of the roof, and the materials used to build it.

But that doesn't mean you don't need to put money away for roof repairs if you're not expecting to replace your roof entirely just yet. Roof repairs can be unexpected and costly to remedy. Some repairs might cause complete failure of the roof, so not only do you need to know how to get a new roof but also how to pay for it.

A great way to ascertain how much to put in your roof sinking fund is to get some quotes from contractors for new roofs or certain repairs. This will give you a ballpark to aim for.

For example, if you know you might need to replace your roof in 5 years and you know you won't be able to afford it in one lump sum or you want to avoid relying on credit to pay for it, then you need to start a sinking fund.

The average cost of a roof replacement is $8,000, so you will need to put away at least $144 per month every month for the next 5 years minimum.

Foundation Repairs

Foundation damage can compromise the entire building, and if it's not addressed or rectified, it can cause massive problems. In some cases, you might discover issues earlier before they become too severe.

Uncovering the cost of the repair can be tricky, especially if you've not experienced any issues or have no idea what could go wrong. Typical foundation repairs can run upwards of $2,200 with an average cost of $5,000. So, this is a good goal to aim for for your sinking fund.

If you wanted to split this over 5 years, it would be just over $83 per month, but choosing to save towards the lower end of the scale would be $33 per month over a 5-year period.

Of course, you should only save what you can really afford, but if you can afford it and other parts of your home don’t need extensive work, saving as much as you can towards foundation work can help you out in a pinch.

Electrical Costs

If you're buying an older home or you know your electrics haven't been updated for many years, then addressing your electrics should be your priority as soon as possible.

However, putting money aside for potential electrical repairs if this isn’t the case can be a great idea because while a complete rewire can put a huge dent in your finances, so too can frequent repairs.

A complete rewire will cost around $7,000 for an average-sized home, more if you live in a bigger property. If you can't afford electrical work, you are putting your home and your family at risk, as electrical faults can be deadly. 

This is why paying into a sinking fund for electrical work can be beneficial. It allows you a pot of money to access to help you pay for any work you schedule or emergency repairs you might find you need. 

You don't need to save money for a new rewire unless you know it's on the cards, but putting money away for repairs can be massively beneficial.

If you're going on the average cost of $300 per call out for electrical work, then putting in as little as $25 or $30 per month can give you a safety net to remedy any concerns as soon as possible.

Plumbing Problems

Of all the sinking fund options on this list, plumbing could be the one you need the most. Multiple things can go wrong with your plumbing. You might encounter a burst pipe, toilet blockage, leaking showers or faucets, or you might need an entirely new plumbing system.

Unaddressed plumbing issues can cause massive damage and result in many problems until and after they are fixed, meaning the initial cost of the plumbing repair might not be all you need to pay.

For example, you might need to replace wood that rotted due to a leak you didn't know you had, flooring that was ruined, or landscaping that needs overhauling due to overflowing sewers.

But how much should you put away per year for your plumbing repairs? If you are working on the average cost of plumbing repair being $315, this is $26.25 per month, but you can put away more if you feel like you might need to and aim for an amount that is representative of your current plumbing situation.

General Repairs

Your general repairs are those things that you expect to need to do due to living in the property. It might be you want to repaint and decorate, or you need to fix broken doors, replace fittings and fixtures, replace walls, plastering, update cabinet doors, accidental damage, and so on. And these repairs can be hard to quantify.

You can go with the rule of 1% of your home value. However, this is based on all maintenance, not just general repairs. So, come up with an amount that seems reasonable in relation to the condition of your home and the type of repairs you typically experience. Then, work out an appropriate monthly savings figure from there.

Appliance Replacements

Coming home to find your HVAC has died, or your washing machine is leaking, or your dishwasher isn't quite working as it should isn't fun for anyone. Nor is trying to find the money to get them fixed or replaced.

Squirreling away some money each month can give you a head start in terms of covering bills associated with appliance repairs or replacements. You can choose to save towards the cost of a new appliance if you feel you might need to, i.e., if it’s nearing the end of its lifespan. You can put money away for repairs, but having a fund of at least 500 dollars per year can serve you well.

The beauty of sinking funds is that you have pots of money put aside for specific reasons, and you do not need to worry about other issues cropping up that use up everything you have saved as you have other finds you can use for those.

It's important that you don't overextend yourself and only put away what you can afford to avoid using it for other living expenses.

If you don't end up using any or all of the funds you assigned for specific reasons, you can continue to build the pot year after year or alter how much you save and put into it to keep building the fund while creating other pots with the extra money for different reasons.

However, as a homeowner, having funds available for repairs can help you avoid your home falling into disrepair and becoming reliant on credit to help you find the work you need.

Our writers like to blog about real estate hotspots. We launched the award-winning Seasons in Colour in 2015 and the luxury property and interior decor blog www.alltheprettyhomes.com in 2024 to cover all your interior design, travel and lifestyle inspiration needs. Download our free bathroom renovation guide here.