I analyzed the cost of moving against the cost of renting it out and buying a new place which has its own interesting quirks. My wife's parents did the keep/rent the previous house each time you move thing while my parents simply rented until my Dad retired. In retirement my wife's parents have a built in cash flow that my parents do not.
Insurance has been the most variable with California adding earthquake and flood insurance requirements. As a component of cost has varied the most (it isn't included in the $600/month which is just maintenance).
On the plus side, with California's no pre-payment penalty I could always use bonus money to pay down the mortgage which both kept its value in the future and mitigated future interest expense. That was always a better net use of cash funds over a savings account. I've always maintained a line of credit on the house which could allow me to "re-access" that value if something unexpected happened.
Not for everyone of course but its a different way of looking at home ownership which isn't commonly discussed.
The parent was talking about the volatility of maintenance costs, not the average. Just like people in different situations need to adjust their investments to achieve the right amount of volatility, for some people it probably makes sense to shield themselves from the possibility of unplanned maintenance costs.
I have no clue how volatile maintenance costs are, but I don't think you addressed it in your reply.
This is a very common way to annualize a very volatile cost, but what it means in practice is you find yourself putting money into the maintenance account when no maintenance needs to be done that month, with the understanding that eventually in the future you're going to have a cost which you can then pay out of that account. You don't go into debt that way to cover random maintenance expenses, because if you did it right there is always enough money in the account to cover your costs.
Granted a string of costs all at once will bite you, but statistically that is not likely to happen.
The goal though is to never use credit card debt to finance anything because you pay so much interest on that debt if you can't pay it off at the end of the month. And in practice it means putting what seems like all your money into weird "future" accounts (maintenance, food, insurance, taxes, etc) but it also means than when you pay to those expected bills you already have the money to pay them and don't have to borrow. You are mailing yourself the funds in the future to cover that cost.
I'm curious, do you really mean multiple separate accounts? What's the advantage to that over putting it all in one single account? After all, if one of your accounts were to run out you'd surely have to draw from the others?
Then, each month I toss that amount into that month's category. So, if I suspect I'll be replacing my roof in 3 years for about $10,000, then I will be adding $277.77 per month. Hopefully my estimation was correct and when I need to replace the roof, there's no financial stress since I'll have about $10,000 sitting in my "new roof" account.
That "account" though is virtual, not a real separate account. Though I do have a separate real account I'll use to hold high-dollar/long-term future savings. But that's just a little paranoia on my side, not wanting to keep all of my eggs in one basket, so to speak. It's just in case something weird happens, like an unauthorized ACH run on my checking account or my wife splits with the debit card and drains it completely on week long bender in Las Vegas. At least the larger value "accounts" or "envelopes" would be unaffected. So, the money set aside for items like a new roof, rebuild of deck, next car, etc., is safe and sound in their own separate savings account.
It works well for car repairs, which I recently confirmed. I always put $100 each month into my "car repairs" envelope. I went about 6 months with no significant repairs and then got hit by two repairs within two weeks for a total cost of about $470. I must admit I really enjoyed the lack of stress over the bill. I simply paid the man his money and drove away still having $130 in that category and it'll continue to increase by $100 per month.
The YouNeedABudget.com style of budgeting has immensely improved my financial situation. It's a Mac app with a companion iOS app, but a similar method is used by the good folks at everydollar.com [2]. Their app is web-based but they also have Android-based apps.
Well. This post meandered about a bit more than I had intended :)
[1] https://www.youneedabudget.com/ [2] https://www.everydollar.com/
When I was a kid I found it fascinating that everyone's money in the bank was in the same pile, but your account number had associated with it the amount of the pile that was "yours". It was not that the $10 bill in lawn mowing money I gave them was going to come back when I withdrew $10. Instead it just went into the big pile. By organizing expenses and income as different accounts in my budget and separating cash management from accounting, I'm able to focus on doing things which make economic sense while maintaining cash balances which are appropriate for different savings or investment goals.