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What is a capex & a reserve?

Short for capital expenditures, CapEx refers to large items in the household that need to be replaced over time. Think things like water heaters, roofs, and HVAC systems. Typically these aren’t things that need to be replaced every year, but every five to 10. How Much Should You Set Aside for Reserves and CapEx?

What is a capex & how does it work?

CapEx, or Capital Expenditures, refers to the large, significant costs incurred to acquire, upgrade, or maintain a property. This could include purchasing the property itself, making major renovations or improvements (like adding a room or remodeling a kitchen), or replacing substantial components (like a roof or HVAC system).

How do you manage a capex reserve project?

Work closely with the contractor on the budget for the project. Maintain a complete, up-to-date ledger for all CapEx spending and review it regularly. Stick to the established budget for CapEx reserve projects to the greatest extent possible.

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