How to Set a Home Maintenance Budget

Dave Ramsey is a money-management expert, national radio personality and best-selling author.

Dear Dave: I was wondering if there's a rule of thumb for the amount of money you should budget for home maintenance and repair. Is there a formula to calculate this?
--Rhonda in Virginia

Dave Says: There's not really a certain formula or percentage to use for this kind of thing. Home maintenance is kind of like car maintenance in that it's going to depend on the individual house. If you're driving an old car, you can expect to put more into it, right? It's the same with homes. The older the house, the more likely things are to need repair.

I think a good way to approach this is to do a checkbook test. Look at what you spent during the previous year on home repair, and it will probably give you a decent idea of what to expect in the future. Assess the reality. If you put a new roof on the place last year, chances are you're not going to need another one for a while.

Just look at the numbers, and give your house a good going-over once or twice a year. This should help you judge the situation.