Homeowners urged to budget for maintenance costs

The true cost of homeownership comes as a surprise to some first-time homeowners. Some may have thought they were home free after paying their down payment, monthly mortgage, insurance premiums and closing costs. Think again!

Homeowners can spend tens of thousands of dollars maintaining and improving their homes over the course of a lifetime. Of course, how much you spend will depend on the shape of the house when you bought it. "A new central air conditioning unit or roof can wreck an already strained budget," said Kim Womack, director of education for Consumer Credit Counseling Service of South Texas, a non-profit community service organization that offers debt and credit counseling and education. "That's why it's important to have a home maintenance budget."

Without one, you will have to borrow money every time the roof leaks or a major appliance breaks down. Of course, you can always place a trashcan beneath that living room leak or go without air conditioning during a hot summer. Some experts recommend setting aside one percent of your home's purchase price to cover annual maintenance and repairs. For example, if your home cost $100,000, you would set aside $1,000 a year for home repair.

If you want to do a better job of budgeting for home maintenance and home improvement, CCCS of South Texas offers the following tips:

Assess your needs. If the central air conditioning unit is 15 years old, you might start saving for a new one. Make a list of what you need to keep your home functional and what you would like to do to enhance it. In general, you want to make only improvements to your home that you can recoup if you sell your home.

Create a home maintenance budget. Once you know what you need and how much it will cost, develop a spending plan. This will help you prioritize your expenses and spread them out so you aren't hit with a flurry of bills all at once.

Do it yourself. While a roof repair might be too much for many homeowners, many can replace a cooling system air filter or place caulking and weather stripping around windows and doors.

Start a savings plan. Open a special home maintenance and home improvement savings account and make monthly deposits. If you belong to a credit union through your job, have the money taken directly from your paycheck and deposited in your account. You are less likely to spend money you don't see. Use this money to cover regular maintenance, emergency repairs, and large periodic expenses, such as roof repairs or that new air conditioning unit.

Use credit carefully. Some home repair centers will offer you a 10 percent discount if you sign up for their credit cards. This can be a good deal if you already planned on buying an item there. However, be careful of opening a flurry of accounts and winding up with unneeded items. Homeowners should also be careful of rushing into a home equity loan to build a new patio deck. Try to cut expenses and save up the money first.

Get professional help. Half of American households live from paycheck to paycheck sometimes, according to a Consumer Federation of America study, and would be hard-pressed to pay for an emergency home repair. If you need help with budgeting or credit counseling, call CCCS of South Texas at 800-333-4357. A certified credit counselor will assess your financial situation and make recommendations.

Don't let unexpected house maintenance expenses tarnish your American dream. Your home may be your biggest investment, and you need to protect its value by making needed repairs.