{"id":46491,"date":"2026-04-24T05:49:57","date_gmt":"2026-04-24T05:49:57","guid":{"rendered":"https:\/\/microloannexus.com\/?p=46491"},"modified":"2026-04-24T05:50:00","modified_gmt":"2026-04-24T05:50:00","slug":"why-a-lack-of-a-home-budget-is-a-financial-time-bomb-and-how-to-fix-it","status":"publish","type":"post","link":"https:\/\/microloannexus.com\/?p=46491","title":{"rendered":"Why a Lack of a Home Budget Is a Financial Time Bomb \u2014 and How to Fix It"},"content":{"rendered":"
\n

Editor’s Note: This story originally appeared on The Penny Hoarder.<\/em><\/p>\n

Home improvement projects aren\u2019t nearly as fun as those renovation projects you see on HGTV.<\/p>\n

Tasks like cleaning the HVAC ducts or replacing your roof aren\u2019t as alluring as a fancy kitchen remodel. And in real life, you\u2019re faced with the burden of paying to get the work done \u2014 having to shell out hundreds or thousands of your hard-earned cash.<\/p>\n

Many homeowners end up financing expensive repairs around the house, but setting up a home improvement budget can prevent you from increasing your debt load.<\/p>\n

Planning in advance for all your home improvement needs (or wants) gives you time to save up for the costs you\u2019ll face.<\/p>\n

Here\u2019s what to consider when creating a home improvement budget.<\/p>\n

1. Think About What Needs to Get Done<\/h2>\n

As a homeowner, you\u2019re going to run into things that need maintenance work on a routine basis, like removing leaves from the gutters or cleaning out your sump pump.<\/p>\n

You also probably have a good idea of issues that will need to be addressed soon, such as a leaky roof or an A\/C unit that\u2019s on its last leg.<\/p>\n

Start preparing for these expenses by making a list of all your upcoming projects. Think about everything you plan to have done within a year\u2019s time, but also consider work you intend to have done a few years out.<\/p>\n

The longer timeline you give yourself to save up, the less money you\u2019ll have to stash away each month.<\/p>\n

Consider how much wiggle room you have in your main budget while planning out what projects need to get done.<\/p>\n

If you have plenty of disposable income and can easily put aside a few hundred dollars each month. But if you live paycheck-to-paycheck, give yourself extra time to save.<\/p>\n

2. Prioritize What You Need to Handle First<\/h2>\n

Chances are you don\u2019t just have one project on your home to-do list. When creating your home improvement budget, prioritize the most important fixes over nice-to-have upgrades.<\/p>\n

Another thing to consider: Will you need a minor repair or total replacement? Having a plumber come out to fix a problem with your toilet, for example, will cost less than getting a new toilet installed.<\/p>\n

When it comes to nonessential projects, like changing the backsplash in your kitchen or upgrading appliances, prioritize the work based on what will give you the most satisfaction \u2014 or what will provide the most resale value, if you\u2019re planning on selling your home in the near future.<\/p>\n

3. Get Multiple Quotes to Determine Costs<\/h2>\n

You may have an idea of how much you can comfortably afford to spend on a project, but you won\u2019t be able to accurately budget for the work until you get some quotes from potential contractors.<\/p>\n

Seek out bids from at least three different vendors so you have options \u2014 and so you know you\u2019re getting a fair price.<\/p>\n

You may even be able to negotiate a lower price from your preferred contractor by informing them that a competitor is offering a better deal.<\/p>\n

Jill Emanuel, a financial coach at Fiscal Fitness Phoenix, told The Penny Hoarder she got five quotes when she got her entire air-conditioning system and ductwork replaced this past spring.<\/p>\n

She also recommends checking out home-improvement blogs and podcasts, watching tutorials on YouTube and asking friends and family for recommendations as part of your research.<\/p>\n

4. Set Up a Sinking Fund to Save for the Cost Over Time<\/h2>\n

Once you know which projects you need to tackle and how much it\u2019ll cost you, it\u2019s time to create a plan to save up for those expenses.<\/p>\n

Instead of getting a loan and paying over time (with interest), start putting money aside little by little until you can pay for the cost outright and don\u2019t have to go into any debt. That\u2019s called contributing to a sinking fund.<\/p>\n

Say you\u2019re planning to replace your old refrigerator with a new model that costs about $1,200. By saving $200 a month in your sinking fund, you\u2019d have the cash to buy your new fridge in six months. If you can afford to save $300 a month, you\u2019d have the money in four months.<\/p>\n

Even if you don\u2019t have any specific home improvement projects on the horizon, homeowners should regularly put aside money for future fixes and maintenance work. A general rule of thumb is to save about 1% to 3% of your home\u2019s value each year.<\/p>\n

\u201cIf we can be in the habit of putting even a couple hundred dollars [into] savings every single month, label that account for home repairs and projects,\u201d Emanuel said.<\/p>\n

5. Keep Money in an Emergency Fund<\/h2>\n

Despite our best planning, there\u2019s always stuff we can\u2019t prepare for \u2014 such as a bad storm that floods the basement or a neighbor\u2019s kid who whacks a baseball through a window.<\/p>\n

That\u2019s why it\u2019s important to keep money aside in an emergency fund (and to have an adequate home insurance policy).<\/p>\n

Personal finance experts recommend having three to six months\u2019 worth of expenses in an emergency fund. This isn\u2019t money you\u2019d tap into for routine home maintenance or a planned expense, like a remodel.<\/p>\n

The money from your emergency fund should be spent on expenses that are urgent, unexpected and necessary.<\/p>\n

The costs of homeownership can greatly exceed a down payment and regular mortgage payments, but with proper budgeting and saving, you\u2019ll have the funds to keep your home in good condition for years to come.<\/p>\n<\/p><\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Editor’s Note: This story originally appeared on The Penny Hoarder. Home improvement projects aren\u2019t nearly as fun as those renovation projects you see on HGTV. Tasks like cleaning the HVAC ducts or replacing your roof aren\u2019t as alluring as a fancy kitchen remodel. And in real life, you\u2019re faced with the burden of paying to<\/p>\n","protected":false},"author":1,"featured_media":46492,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[51],"tags":[32],"class_list":{"0":"post-46491","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-burrow","8":"tag-featured"},"yoast_head":"\nWhy a Lack of a Home Budget Is a Financial Time Bomb \u2014 and How to Fix It | Micro Loan Nexus<\/title>\n<meta name=\"description\" content=\"Editor's Note: This story originally appeared on The Penny Hoarder. 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