Hi folks I stumbled into here. Looks like we could use a little more traffic, perhaps not as much as REHP however :)

I recognize some names here, and I'm sure many of you know me.
[Crowd groans collectively.]

My latest project, aside from yet another Mexico trip (which I'll probably journal in REHP), is updating my budgets. "Budget" is probably not the best term. More like: try to get an accurate as possible a snap shot of where the money actually goes.

Saturday (10/21) I updated to find the true (?) costs of my home (SFH). Even armed with quite good data, there are always judgment calls.

For example, should I include long-term upkeep (estimate at about $200/mo.) as a budget item? Why not do both?

For those retirees rolling in the dough, that's great, but many of us are on limited income. Mine's in the low $20K range most years.

Anyway, I'm getting to far into a tangent here. I'll cut it short for now.

<<For example, should I include long-term upkeep (estimate at about $200/mo.) as a budget item? Why not do both?

For those retirees rolling in the dough, that's great, but many of us are on limited income. Mine's in the low $20K range most years.>>


I'm always interested in what retirees find it worth to spend money on for improvements. May I ask what your plans include?


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Seattle Pioneer

I think every home owner knows there is always of a list of things that need attention. Many of those take a trip to the hardware store and about $20--if you are reasonably handy. But some like a new roof can cost thousands.

So I would say everyone who plans to own a home should allocate something in their budget for such repairs. But the right number varies widely. If you live in a highly appreciated house, worth say $500K or more, the number you use to maintain the property will be higher than if you live in one of those famous midwestern bungalows that might still be bought for under $100K.

Similarly the age of the property will have a major effect. A newer house, may well have little required for the first 10 years or so. Then starting with the hot water heater, you have a regular series of repairs. Roof typically at 20 years. Furnace at 25. AC at about 20. Various major appliances at 10 to 15. Older houses can be kept in shape for over 100 years, but costs tend to escalate especially as majors like rewiring, new plumbing, chimney repairs, and major remodelling can come up. Here the range has to get wider.

As a basic number, I would say $1K per year will cover most homes when they are new. And if you don't spend that bank it, because some jobs are $3K or more and will eventually come up.

Why not do both?

What is both?

Small issues will always occur. Large issues such as roof replacement, significant plumbing issues, appliance replacement are going to occur. It is only a question of when.

Debra

Home improvements? I'm proud that this (the third home I've owned in 7 years), that it'll be the first that I stayed in > 2 years so I can keep the capital gains when I sell.

In this case, it's a new house (< 3 years.) Even so, there have been some repair issues already. Hmmm, maybe I should budget those "unexpected" repairs.

Also, I am of a personality type that doesn't seem to remain long in one place. The longest I've ever lived at one address was 5 years, by my reckoning. Also, my first two homes were older units that did have a lot of repair or rennovation during/after my residence there, so in that sense I see the value of improving a home. Since my current home is virtually new, I will probably defer the non-critical repairs until it's time to sell it...that is probably standard practice anyway. I know that a refrigerator can die, or a pipe get clogged, or a water heater die ... because those exact things have happened in homes I've owned.

I think what I was driving at in my first post was that, a form of budgeting, get an accurate picture of what the known costs are (the "lower bound" to use a college term), and then you can estimate what upkeep might be (0.1% of home's value, per month is a rule o' thumb). Similar for health insurance: I know what my annual costs are, but don't know when or if I'll have a major costly crisis. Even some fairly minor health issues have cost an extra $1000 or $2000 in my already tight budget. Add to this my current car, an old bomb ('93 Saturn) still running well, but at 180+ K miles (BTW, the odometer no longer works...), huge repair bills come with the territory.

I'm a candidate to reduce my expenses, some are relatively fixed (the home), but still room to cut. In my case, I eat out a lot, even a McLunch costs something. I like to travel, but even cheap travel costs money.