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.
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.
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?
Hi, I’m Jackie
I believe your home should be a reflection of you. My home style is DIY Modern…handmade, simple, and fun, just like me!
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