Why You Need a Home Fix-It Fund

Money in a jar saved for emergency home repair
Image Credit: Dreamstime

If you own your home or are thinking about buying one, are you prepared for the costs associated with fixing it if something goes wrong?

Money expert Clark Howard says that every homeowner needs to be prepared to deal with the home repair issues — small or large — that are bound to come up eventually.

Here’s what you need to know about why home fix-it funds are so important and how to start one…

Why Saving Money for Home Repairs Is Key to Your Financial Security

“People who’ve only ever lived in apartments think of just picking up the phone and saying, ‘Hey, I’ve got a problem with whatever!'” Clark says.

“But homes depreciate over time, not appreciate. People think that a home increases in value. But it’s actually the land that a house sits on that may well increase in value over time. The actual house itself — the structure — requires continual tender loving care, maintenance and repair.”

For that reason, Clark says it’s key that you establish a home fix-it fund to make sure you have the funds to pay for that upkeep and repair without going into or adding to your debt. He also has a very simple formula for figuring out how much you need to save.

How to Calculate What You Need to Save in Your Home Fix-It Fund

“I want you to think about, over the course of a year, putting the equivalent of two monthly mortgage payments aside in a maintenance and repair fund for your home. That may not be enough money, but it’s a really good start.”

Rather than try to do this in one lump sum, Clark recommends that you make your home fix-it fund one of your budget categories.

Download our Free budget worksheet: The CLARK method to create a monthly budget

“The way I like for you contribute is every month when you make your mortgage payment. Let’s say your mortgage payment is $500 a month, just to keep it simple. Every month you’d put around $80 a month into a savings account,” he says. “Over time you’ll build up a cushion of cash for maintenance and repairs so that you’re not fighting from behind when something does go wrong.”

By “fighting from behind,” Clark means putting those repair bills on a credit card or taking out a home equity loan that you have to figure out how to pay back.


To figure out how much you should be budgeting to set aside each month, follow these steps:

  1. Take your monthly mortgage payment amount
  2. Multiply it by 2
  3. Divide that by 12

The result you get will be the amount Clark recommends depositing in your home fix-it fund each month when you pay your mortgage.

You should keep this money in a separate high-interest savings account to be used only for home upkeep and repairs.

Common Home Repairs and What They Might Cost You

In case you’re still not convinced you need a home fix-it fund, we checked in with HomeAdvisor to get some estimates on the costs of some common home repairs. You’ll likely encounter one or more of these if you stay in your house long enough:

Repair estimates are for a home in suburban Atlanta

  • Repair a roof: $351 to $1,343
  • Install a new roof: $5,195 to $10,166
  • Install a new tank water heater: $763 to $1,443
  • Repair a foundation: $1,840 to $6,566
  • Install a new central air system: $3,750 to $7,244

Final Thought

As you can see from the numbers above, home repairs aren’t cheap. In fact, some of them can be as expensive as a new car. But with some forethought and budgeting perseverance, you can make sure you’re prepared when the inevitable issues arise with your home.

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