I know somewhere along the way someone told you it is rude to talk about money.  Well, we are going to do it anyway.  Because it’s important.  Screw etiquette.

There is no simple answer to this question.  It will vary greatly from household to household.  But we all like a good rule of thumb, right?!

In his book Apartment Therapy 8-Week Home Cure, Maxwell Gillingham-Ryan, says you should plan to spend “a sum comparable to one month’s mortgage payment or what rent on your apartment would be if you rented it” per year for small annual updates.  So, if you mortgage payment or rent is $2,000 per month, you should budget $2,000 annually for your home.  He adds, “For larger, onetime projects, such as when you move in or hit the seven-year mark, consider spending as much as you would on an automobile.”

Gulp! When I first read that I got a lump in my throat. The yearly amount seems do-able, but the seven-year mark amount sounds like a lot of money. And, I will be the first to tell you I enjoy spending money on my home. But thinking of it in a big lump sum was uncomfortable.

Maxwell explains, “The logic here is that the amount you will spend on a car is an accurate, personal number.  It is closely linked to your style and what you can generally afford.”

I love that he didn’t throw out a flat number for everyone, like $40,000.  A set number might be too high for some people and too low for others.  By relating it to your rent or mortgage payment and the what you would spend on an automobile he is illustrating the relative investment you should make in your home annually and periodically.

I like it.

But it got me thinking. Why were the lump some amounts so uncomfortable for me to think about?  Why do we work so hard to NOT spend money on our homes?

For some it seems frivolous. Or wasteful. Or materialistic.

How much should you spend on home decorating? | www.tealandlime.com

But we freely spend on beauty in other areas of our life. You spend that amount on a car every 7 years or sometimes more often. You probably get your haircut (and colored) every 6-8 weeks. You might get your nails done even more often. And, you buy new clothes regularly (even when all the old clothes still fit).

Let’s go with the personal beauty examples here. You probably already get your hair, and maybe your nails, done regularly. What if I told you to budget $1200 a year for you hair and $500 a year for your manicures. Sounds ridiculous right? That’s $1700 a year on personal beauty.  But that is what you are already spending for beauty.  You just spread it out into individual payments and don’t notice the total annual cost.

Why then do we groan at the cost of a $200 mirror or a $1000 chair, both of which are sure to last way longer than that gel manicure?

You would never go to the place that promises a $9 haircut and color, right? Heck no. You want good-looking locks and you know that costs more.

Why do we always hunt for a bargain for our homes?  Using the leftover money scraps, if any.

You wouldn’t buy your entire wardrobe from Walmart, right? No. Instead you’ve learned the art of mixing and matching inexpensive and designer pieces.

Why is it so hard for us to bring ourselves to do the same in our homes?

I applaud Maxwell for putting a number out there. Now, he framed it to his clients in New York as spending on their homes what they would have otherwise spent on a car.  But whether or not you own a car, I think you should be investing in your home.

Use your money to create lasting beauty in the one place you spend most of your time.

We routinely budget for things that bring joy and beauty to our lives. We earmark funds for movies, haircuts, flowers, vacations, yet we don’t consistently put money towards our homes (unless it is a repair of major renovation).

If you don’t already, I say it’s time to add a home spending category to your monthly budget.  Maxwell’s price ranges seem like a good starting point.  With his method, you would budget an amount equal to 8-9% of your house payment per month.  And save separately for larger periodic improvements.

Once you make budgeting and investing in your home a habit, it won’t be nearly as difficult to save up for the pieces you really want or to handle an emergency repair.

So how much should you spend and on what?

Well, it depends.

I know. Sorry that isn’t the crystal clear answer you were hoping for.

I think the point is to add purposeful home spending to your budget. Don’t put yourself in the position of needing to find a bargain. Plan for the things you really want in your home that will create joy and beauty. Tweet that!

As much as I love spending money on my home, I also know that it can quickly become frivolous and empty. Nearly two years ago I did a month long spending hiatus that drastically changed how I view buying things for my home. Instead of many small, impulse, meaningless purchases, I retrained myself to budget and save for the things I really wanted.

Look at What You Are Already Spending

Add It All Up

It might be eye-opening to tally what you’ve spent in the last several months on your home, even if you didn’t have a budget for it.  Go through your receipts or bank statements for the last 3-6 months and add up all the purchases you’ve made for your home.  This should include furniture, home decor, home improvement supplies, as well as craft supply and fabric purchases used for home decor.

When you are adding it up, don’t forget money you spend on home magazines and books, small impulse buys, home repairs, and money you’re already saving for home improvements.

Are You Spending In The Right Places?

Once you add it all up, calculate your monthly average.  Now, reflect on the types of purchases you made and how much you spent.

Do you spend more than you thought?  Or less?

Spending too little is as bad as spending too much.  It is important to invest in your home.

If you discovered (or already knew) you are spending very little on your home, consider what you want to start investing and saving for your home.  Look to other areas of your budget for places to cut back, so you can meet your home spending/savings goals.

Recently, we started getting better about managing our family budget and couldn’t believe the total amount we were spending per month eating out.  We didn’t notice how all those “small” purchases added up. Seeing the big total for the month made us realize what we would rather do with that amount of money.

Is the amount you spent in line with what you got in return?

For example, I discovered I was spending $150 a month or more on things for my home.  But when I reviewed what I got for that money it was nothing more than small home decor, impulse buys, fabric I hadn’t used, and maybe the occasional roll of painter’s tape.  Meanwhile, we were pining over a certain piece of furniture we thought we couldn’t afford.  Turns out if we saved the same amount of money for several months, the piece we really wanted wasn’t so far out of reach.

If you had the same amount of money per month to put toward your home, what would you really spend it on?

It’s time to reframe the money conversation.  I am going to bet your answer to this question isn’t the same as what you actually spent the money on.  Recognizing this can help you think differently about your home-related purchases.

Give Your Money a Job

We use You Need A Budget for our monthly budgeting.  I love their philosophy of every dollar needs a job.  Sometimes that job is for spending, sometimes for saving.

It’s difficult to swallow putting away a big chunk of money every month for a general category like “home spending”.  When you don’t have a purpose for that money it’s easy to justify using it for something else you want in the short-term.

Instead, decide what you want to use the money for.  What is your biggest home goal for the year and how much of your annual budget will it require?  What’s your next goal and how much does it cost?  Continue until you have a purpose for every dollar of that annual budget.  Now, don’t go planning to spend it all on pretty stuff.  Unplanned home repairs and felt pads for under the dining chairs aren’t sexy, but they are important to plan for too.  Knowing what you are budgeting or saving for makes it easier to protect that money, so it’s there when you want to make that purposeful purchase.

The same goes for the larger periodic sum of money to make a major improvement every 7 years.  What is next on your list.  How much will it cost?  Do the reverse calculations to determine what you need to save every month for that project.

Give that big lump sum of money you are trying to amass a name…give your money a face.  The money becomes a symbol for what you really want.  It’s not $20,000, it’s the deck that will finally give you an outdoor living space.  It’s not $40,000, its your dream kitchen remodel.  When your financial goals have a specific purpose and every dollar has a job, you’ll be more motivated to reach the goal and less likely to steal from that pot of money for frivolous spending.

You can skip the specifics, but I am curious to know how you budget for your home spending?

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18 Responses to How Much Should You Spend In Your Home?

  1. Lacey says:

    This article brings up some great points. I definitely fall into the “too little” category. When I consider how old some of the things in my house are, it’s rather embarassing… But on the flip side of that, my husband and I will spend the money to get really high quality pieces-like our natuzzi leather furniture and solid wood dining and entertainment center.

    • Jackie says:

      Lacey, Nothing wrong with old. Investing in great pieces that can age well is a great thing. So often we don’t realize that cheaper quality can wear out faster and needs to be replaced more often (meaning more money). That’s where saving on some things vs. splurging on others comes into play.

  2. Amanda says:

    I bought an old, old house when I was single. I am now married, and my husband has very different ideas on how to spend money (he’s the excel document type, I’m more the color-coded post-it type). I realized after he moved in that I was buying stuff from the thrift store to fill up my home, to distract from my college leftover furniture days and the major house projects we needed to do (refinished floors! new windows! a new kitchen! where does it end??). He pointed out if I had not spent all that money on fillers, we could afford the things we wanted, and the house would be less cluttered. I stopped going to thrift stores cold-turkey, and honestly don’t miss it. All I have to do is look lovingly at the floors we just did to remind myself there IS a reward for saving! (one project down, 497 to go:)

    • Jackie says:

      Amanda, Sounds like you married a very wise man. Those fillers make us feel good in the moment, but years later the things we really dreamed of didn’t get done. So happy for you!

  3. Amber says:

    This is terribly true! I added up what we’ve spent the lat year an am more than shocked at how much it was!! We spend money going to grab dinner all the time, yet we hate “splurging” on a new rug. Go figure!

    • Jackie says:

      Amber, totally eye-opening right?! It changes your perspective completely. Now I hope you can make some solid plans to get your dream rug.

  4. One of my actions for the remainder of this year is to get back into my good budgeting habits … and get my husband on board. I’m a planner and list maker and he’s not so budgeting has always been a contentious issue for us. I know that in order to live our best life, we both need to be making decisions on our money and giving each dollar a job. Since buying our current house two years ago I’ve spent well on decorating as I’ve had a really strong vision of what I wanted to create from the start. We have just about completed a full kitchen renovation and while I cost a lot we also saved almost as much as we spent by doing 95% of the work ourselves. There have been no regrets with spending this much. Yet, for 6 months I’ve been agonising over spending $700 for ‘the perfect chair’. I know I’ll love this chair forever and I have the money so why can’t I just go ahead and spend the money? It’s that mentality of putting everything/everyone else first I think. Thanks for the reminder Jackie that it’s OK to spend money to create a beautiful space in which to spend our time and live our life.

    • Jackie says:

      Fiona, thank you for sharing! It’s definitely a team effort for budgeting, but someone’s gotta lead the way. Not that you need my permission to make your beautiful home, but I know how easy it is to second-guess the bigger commitments.

      My hubby and I were just talking last night about our two yellow armchairs that family has claimed dibs on if we ever want to sell them. We love them so much, we will never sell them. But I remember agonizing over the $1200 we spent on them. Now over 4 years later, I think they were worth every penny.

  5. jessvii says:

    I have five things I’d like to say in response. First, to start with your question regarding home budgeting, I shoot for about $200 per month, but sometimes go over or under since big items like a sofa are clearly going to be over that amount, but other months I’ll buy nothing or only something small like a couple of picture frames from IKEA. This is might be more than Maxwell suggests because annually it is more than one month’s mortgage, but I think it’s realistic for my situation, and because his term “small updates” is ambiguous – at what point does an update graduate from being “small”?

    Second, I am speaking for myself here, but I do not “freely spend on beauty in other areas” of my life. Your examples, cars and hair/nails, do not fit my situation. I bought my car used in 2007, and although it is now nine years old, I’m not sure if I can justify trading it in, even though my car use needs have drastically changed (hello baby) and my car no longer matches my needs. If my needs hadn’t changed, I wouldn’t even consider trading my car in until it dies. Regarding haircuts, I shoot for three trips to the salon annually, along with home color touchups (about $18 annually) and selfie trims (free less the cost of a $15 pair of hairdressing scissors). Regarding manicures, I opt out because it’s not maintainable – manicures change the color of nails to an unflattering yellow and thus continued manicures are needed to cover that up. I guess the word I’m looking for regarding my beauty spending is “sustainable” – I shoot for habits that are sustainable for my family’s budget.

    Third, I’d recommend Mint.com to anyone. It looks at all the places you’re spending money and then gives you a pie chart for each month which divides your spending into categories (e.g. groceries, home, travel…). You can even go into Mint and edit your transactions to move them into special categories. For example, I created a gifts-for-other-people category and then moved a few of my Amazon purchases into my new “gifts” category. I had no idea how much money I was spending on gifts (anniversary, Valentine’s Day, Christmas, birthdays…) until I saw them all added up. You can also create monthly budget targets for each of your categories (e.g. $100 a month on gas), and Mint will tell you each month if you go over or under your budget for each category. Because Mint automatically knows where you’ve spent your money (unless you pay in cash), Mint is much, much easier than: “Go through your receipts or bank statements for the last 3-6 months and add up all the purchases you’ve made for your home.” Did I mention that Mint is free?

    Fourth, I’ve started to spend less money in general once I accepted that everything in life is temporary. Nice clothes will last longer than cheap clothes, but eventually they will need to be replaced. The same thing is true of high-quality house paint, high-quality furniture (at least while children live at the home), new kitchen cabinets, new flooring, etc. I used to think of home purchases in terms of infrastructure – I wanted to remodel a room and then forget it. But now, I’ve realized it’s so much more complicated than that – now, I think about maintenance costs and time (do I want to reseal granite countertops every year?), life span (when will it need to be refinished or replaced?), resale value, flexibility (can I take it with me if I move?)… and trendiness. I like trends, but I’ve noticed that some bloggers and designers will redo an entire house quickly and the look will be so very 2014, which is fine until 2020 rolls around and the whole thing looks dated. Instead of a gut job (think of the HGTV show “Property Brothers”), I try to identify things that must be replaced, and focus on just those instead.

    Fifth, “home spending” isn’t always just home spending. For example, if DIY is a person’s hobby, then money spent on DIY doubles as part of that person’s entertainment money/budget. Or, if a person loves going to flea markets (or estate sales, or auctions, or yardsailing), then money spent on those trips doubles as part of that person’s entertainment budget. An analogy would be someone who loves to cook – the money spent on organic, high-quality ingredients counts as both food and entertainment for that person. Generally speaking, a person can spend slightly more on double-duty (double-category) items than they would otherwise and still feel justified. When I took the mood board decorating class, that counted as part of my home spending budget, but it also counted as education and entertainment, so I considered it a triple-duty item.

    • Jackie says:

      Jess, Love what you are sharing here. The personal beauty items were just examples (some of which I don’t do either), but I wanted an easy example to illustrate where small, routine costs add up to something bigger than you think. I love your perspective on home remodeling…you’ve got your focus in the right place on making important, lasting changes. And, I totally agree on double-duty spending, but sometimes we have to be careful. I did justify my frivolous home spending as a hobby for a long time, when reality I was trying to fill other voids in my life with things. Decorating my home is still a hobby, but I am more mindful of my spending related to it…as in not home shopping or buying just to past time, but rather to create lasting beauty. There are always things I can do for my hobby that cost nothing, too (might be why I love to rearrange furniture so much :)).

  6. I love this post, Jackie! It really puts spending in terms of relativity. I just had a convo with my husband about how I feel guilty spending for the home. He also suggested creating a budget to keep me on track and so mentally I’ve earmarked funds for a specific purpose mitigating any feelings of guilt.

    • Jackie says:

      Jennifer, oh the guilt. We want to spend on our homes, but when we don’t track it the guilt can definitely mount. It’s funny that I mention not realizing how much you spend, but sometimes we can over-inflate how much we spent…contributing to the guilty feeling. Budgets are great for feeling empowered and entitled to spend what you’ve earmarked in a category. Love that your husband is working with you on the budget.

  7. Connie says:

    Your comments plus jeevii’s are a fabulous tutorial on spending. Looking at the small things pays for routinely (i.e. beauty salon,lattes, dining out, liquor, cigarettes, clothing…)and gtting a sum can be a revelation. I asked myself a while back if bringing my lunch to work and saving $40. or so per week, buying only 2nd hand clothing and doing some part time work would be doable in order to help fund my new kitchen. happy to say: Phase I is done (appliances, floors, paint are done) And Phase II (cabinets, counters, and tile) will be this fall. I’d say your advice is worth studying and REALLY thinking about.

    • Jackie says:

      Connie, Congratulations on the kitchen. I love how you found places to cut back or adjust your spending habits to make way for a big home goal. Maybe when the kitchen is done, you’ll continue with bringing your own lunch and put that money toward another big dream, home-related or otherwise. Thanks for sharing.

  8. brbraroe says:

    Love the article. Very thought provoking. I have to mull it over for a while.

  9. Gwen says:

    Oh the days of saving and saving and not touching it!! But as I look back on life, it seems I got new couches–quality ones–when we seemed poorest yet maybe our tax refund was bigger than expected? It seemed The Lord provides. I had off white carpet and hand scrubbed it on hands and knees and it looked fine for long past its day. Our new flooring came at just the right time. I had money in checking and bought the excess of a friend’s purchase. Today I resisted a white West Elm look alike vase because I do not need it. I love decor. Don’t laugh. Little things! So I might have a bunch of vases out from my Mom in the spring all filled with flowers. She gave me neat candlesticks. Over the years too. I might use a cluster on a tray. I mix things up. I had not spent birthday money so I got a new duvet cover and sham with an extra savings from West Elm for just $40 total. I purchase many items like a side table for a guest room. I’ve been looking for a year. With my World a Market coupon it was less than $50. A sturdy iron round table. Yet the lamp?? A designer lamp I admired and knew I’d never not love so I got it at a local boutique when it was 50% off. I’m designing and creating my own headboard in a way I’ve never seen done. For a low price. But my headboard and bench were not inexpensive 12 years ago yet I still love them. When I was working, I budgeted $100 on a designer piece on sale for my home. ( long ago!!!) now with life as it is, I’m thinking more towards will I have enough saved to last me if I live to be 90? But weddings are paid for and so is college. I’m glad I was thrifty. And I’m glad I splurged on a few pieces here and there. One being the pool. But right now, medical costs are really taking lots of my cash flow. Since I’m housebound, I eat at home! I used to cook nightly but that isn’t possible. Save now for if I had not been so frugal all my adult lifeand even before, I believe my injury would have created a homeless situation. Sooo much have I had to use out of savings during this time. So my advice?? Couches and carpet and sinks and dishwashers and refrigerators and washers and dryers all wear out at seven years or look shabby. If things are not replaced all of a sudden the entire home looks shabby, and unkept. Owning a home means taking care of it in and out. I could go without hair for a year and more. I did. But there also is a point where one deserves to be pampered with an outfit that fits and looks good on you. Don’t always feel all must go to everyone else. Its a balance. But even in lean times like now, we give to The Lord plus save.

    • Jackie says:

      Gwen, Beautifully said. Sometimes other things take precedence over spending on our homes, by there should always come a time where we take care of ourselves (which includes or homes) and splurge on things we love.

  10. Deb says:

    Oh boy, my husband and I have paid and paid and paid for house updates we never expected. We’ve paid enough for numerous new cars! That’s why I have an older car now, LOL. I’m ready for a condo again!!

    Also, I think there are “decorating” updates (furniture, new tile, new kitchen cabinets) and there are “house system/maintenance” updates which are less fun (furnaces, water heaters, new roof). House system stuff is necessary and is at the new car spending level, but thankfully you’re more likely do this over the years as needed and not one lump sum. But you will be spending it! So yes we need to save up. Everyone should have realistic knowledge of this before they buy a home.

    The problem I see is people buy a house that requires BMW level spending to keep it properly updated but they have a Buick budget. Yeah you certainly can get away with Buick-level updates. But you might be compromising your house value. Maybe people can afford the mortgage but they really can’t afford the house.

    On the flip side, buying a house where previous owners did things on the cheap often costs you when you need to re-do things that don’t hold up over time. It takes experience to know what to look for.

    I wish there was a class in high school to teach these things to everyone! Really! These are the things that prepare you for real life.

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