One of my annual budget busters is home improvements. In my book, a home improvement can be anything from a new throw blanket to replacing flooring. Thankfully, I no longer have to repair my own floors since I’ve moved back into an apartment (a definite plus), but I still enjoy making small improvements to my living space. One recent improvement was replacing our 12 year old dishes. Over time our set has become fragmented (quite literally with pieces breaking over the years and having to be thrown away.) Mr. LH and I decided it was time to replace the weary set.
Definition: Slush fund (n.) – 1. Money set aside for future bills, 2. Money found floating in a gutter after a snow storm.
Not having budgeted for this expense, I relied on my “slush” fund account that I leave linked to my main bank account. I decided to pop into Kohl’s (I think this is my new favorite store!) and check out their dishware. Instead of opting for a box set, I decided to put together a piece-meal array of dishes and bowls with the help of Mr. LH. We were in luck. The dishes we liked the best were marked down 70%. We mixed and matched a pattern to a few solid colored pieces and walked away with a beautiful 6-piece set including dinner and salad plates and new bowls.
However, I know this won’t be the end of our “home improvements” for the year. If anything, it’s just the beginning. Based on previous year’s figures, I know I spend about 7.5% of my income on this category. I don’t anticipate any other large purchase this year, so I might be able to fudge the number down to 5%. With that being stated, it means I need to save $290 a month to cover any future household item. Wow. Now that I’ve converted that percentage to a dollar amount, that’s sort of high!
As someone who knows I go over my home improvement budget each year, I vow to stay on target with these following methods:
- Wait to purchase a “must needed item.” A lot of times, if I just wait, and wait, I realize I don’t need the item.
- Wait until the item becomes deeply discounted. If it’s a household item I just can’t “live” without, I’ll wait until it goes on sale.
- Allocate $290 each month of my “slush” fund money to the home improvements category. I’m surprised by this amount, but that’s what budgeting is for – surprises and then….corrections.
- Make due with what I have. Instead of purchasing a new item, maybe I can work with what I already have.
Obviously, if I budget for home improvements throughout the year and then end up spending less than what I budgeted for, the additional money can roll over to next year’s fund or be stashed away for retirement – my 2012 / 2013 “to be revised” goal.
How do you budget for home improvements?
23 Comments
We budget for improvements but for us it’s been mainly repairs. I would like to boost this so that we can do some costmetic improvements more often. Ideally we’d like to contribute about 2% of our home value per year toward repair and upgrades. Right now it’s around half that, so we have a ways to go.
We don’t budget for improvements, we just throw everything into the EF, but we need to change this.
We have two parts of our budget for this: the “Home Depot” budget for those things that come up, and a “major projects” fund. We’re getting ready to redo our bathroom in a few years and are slowly putting away funds for that project.
My favorite definition of a slush fund is definitely #2. I’d love to find that particular fund, if you could provide the address.
@AverageJoe – That’s a great way to plan for larger repairs. Good luck on the bathroom!
Like Joe, we have a major house savings account and a minor one. Majors are like remodeling and deposits for future purchases. Minors are furniture, rugs, dishes, etc. Last year was a MAJOR with the roof, a/c, living room, kitchen, master bath all being remodeled. Playing the savings game now for a possible purchase in Louisiana later this year.
@Hunter – Small and Large savings accounts are great strategies. Where in Louisana?
This is very helpful…Thanks for the tips you shared us here…
We need to start budgeting for home improvements. We need four new windows, a sliding glass door, and two exterior doors sometime in the next few years, with no plan in sight — eek!
@Christa – That’s a lot of home improvements! Windows can improve a home greatly, but they’re not cheap. Good luck on those upgrades. 🙂
We need to start budgeting for home improvements. We need four new windows, a sliding glass door, and two exterior doors sometime in the next few years, with no plan in sight — eek!
Good score on Kohl. We like IKEA for those kind of things.
I’m not planning to spend much on home improvement this year, but the toilet seal ring is leaking. It’s probably a good opportunity to get a nicer toilet…. We’ll see if I can find anything nice.
@Retireby40 – Sounds like you’ll be purchasing a toilet soon – and a ring of course. Good luck on changing that sucker out!
Have you considered waiting until department stores like Macys have ridiculously insane one-day sales? I’ve heard of people going home with Ralph Lauren pillows (who knew they made pillows) for less than 10 bucks!! Target is a good place to get little decorative things as well.
@Sandy – I’m not a huge shopper, but I’ve heard of those sales. Actually, a few years ago we scored on some Macy’s towels that were being discontinued. They were great (we still have them but they’re getting a little worn).
Mandeville, it’s on the north shore of Lake Ponchetrain…hurricane country! My wife will be commuting to and working at Stennis Space Center in Mississippi. Our preferred location is all about the school district. Plus, there’s an amazing bike path that I’mm looking forward to exploring. Apparently it’s difficult to ride on the roads there 🙁
@Little House
@Hunter – Good luck with the move! I’ve also read that LA isn’t very bicycle friendly and that’s too bad. But at least they have a great bike path for you to check out!
We just bought a new condo, so the update expenses were quite large. Normally, I just budget a certain amount monthly for home decorating, and repairs. Makes it very easy!
@Barb – Setting a monthly budget for repairs and decorating is very smart. I know that when you move, there’s always more repair or costs than anticipated. Someday I’ll experience that. 😉
That’s one of the nice things about being a renter (at least one with a responsive landlord) – if something breaks I just pick up the phone. Many folks don’t realize how much home ownership costs beyond the cost of purchase, so thanks for bringing this to mind.
@Well Heeled Blog – That is a benefit to renting as long as the landlord fixes things. 🙂 My current rental is a large complex, so they are pretty quick to repair things. My last rental house was a nightmare! The slumlord didn’t fix ANYTHING! We paid and did all the work ourselves. It was such a money pit…and it wasn’t even ours.
we have been flying by the seat of our pants when it’s come to renovations and so far so good. We try not to go over $500 a month, but some months its more, some months its less.
When you buy an old house, unexpected things seem to pop up all the time it seems.
Gill in Canada
@Gill – That’s definitely true with older homes. But at least you can say it has character! 😉
Reading your post makes me realize that a lot of people enjoy doing renovations but with a budget but most of the time, they neglect some safety precautions such as wiring, etc. Sometimes they only think about what’s going to look good but not really the safety of the people living in it. So if you’re in a budget consider the NEEDS first.