How to Budget for Home Maintenance with a 1% Annual Rule

Pick your model

Deciding how to fund the upkeep of your home doesn't have to be a source of friction. The 1% Rule suggests setting aside one percent of your property’s total value every year for maintenance and repairs. How you split that amount depends on your specific relationship dynamic.

• The Proportional Partner (Income-Based): Best for couples with a significant income gap. You contribute based on your "ability to pay," ensuring neither person feels drained by the house.
• The Equal Equity (50/50 Split): Ideal for couples who own the property in equal shares and want to keep their investment contributions identical.
• The Hybrid Cap: Best for those who want to split essentials equally but scale contributions for "nice-to-have" upgrades based on individual comfort levels.

Why the 1% Rule works

The beauty of the 1% rule is its simplicity. It transforms "unexpected" disasters—like a failing water heater or a leaking roof—into planned expenses. By taking the total value of your home and dividing 1% of that figure by twelve, you get a monthly "subscription" price for your peace of mind.

This fund isn't for new cushions or a trendy lamp; it’s the "health insurance" for your building. When you treat maintenance as a non-negotiable joint essential, you stop "policing" each other's spending and start protecting your shared asset.

Copy-paste rules for your household

Feel free to adapt these rules into your own shared financial agreement.

Rule 1: The Monthly Maintenance Contribution

"We will calculate 1% of our home's current value and contribute 1/12th of that amount monthly into a dedicated High-Yield Savings Account. We will split this contribution [60/40 / 50/50 / Proportional to Net Income]."

Rule 2: The 'No-Ask' Threshold

"Any necessary repair costing less than [5% of our monthly take-home pay] can be paid from the joint maintenance fund without a formal meeting. We simply notify the other person via our shared app/chat."

Rule 3: The Emergency Priority

"If the maintenance fund is empty and an urgent repair is needed (water, heat, safety), we will cover the cost from our individual 'personal treat' buffers in the same ratio as our mortgage payments."

Conversation prompts

Sit down once, agree on the logic, and then let the system run. Use these prompts to get aligned:

• "What defines a 'repair' versus an 'upgrade' for us?" (e.g., Fixing a broken tile vs. retiling the whole bathroom).
• "At what point do we stop DIY-ing and call a professional? What is our 'time-versus-money' threshold?"
• "If we have a surplus in the maintenance fund after two years, do we keep it there or use a portion for a 'home-iversary' upgrade?"

Three options for fairness

1. The Income Weighted Split: If one partner earns 70% of the household income, they cover 70% of the maintenance fund. This ensures the "house-rich, cash-poor" feeling is avoided for the lower earner.
2. The Equity Match: If you plan to sell the house and split the profit 50/50, splitting the maintenance 50/50 protects the logic of your investment, regardless of current salary.
3. The 'Sweat Equity' Credit: In some cases, one partner provides the manual labor for repairs. You might agree that the "handy" partner contributes a lower percentage of the cash fund in exchange for their time and tools.

If this feels hard, start here

If calculating 1% of your home value feels overwhelming or the monthly number looks too high for your current budget, use the 10% Buffer Rule.

Simply add 10% on top of your monthly mortgage/utility total and send it to a separate "House Pot." It’s a small enough nudge to be manageable, but it ensures that when the plumber eventually knocks on the door, you're opening it with a smile rather than a stress headache.