Thursday, September 1, 2022

5 Budgeting Tips for First-Time Homeowners

Purchasing a home means taking on a large financial responsibility. Any first-time homeowner should have made good use of a house payment calculator to determine what they can afford.

Budgeting is key when it comes to owning a house, and there are many ways to do it that will make the process feel like less of a burden.

1. Monitor utility bills and usage

As a homeowner, you will most likely be taking on new utility bills, or seeing a drastic change in utility bills you’re used to paying, especially if you’re moving to a larger space.

Be conscious of your utility usage throughout the month, and make adjustments where needed. Make sure all windows and doors are sealed properly to help with the heat in the winter, fix any leaky faucets, and be aware of how many lights you have on at any given time.

2. Build up an emergency fund

You never know what might come up in terms of costs having to do with your home. Having a nest egg to pull from means you can address a problem without taking on debt or stealing the funds from another priority, like retirement.

A broken appliance or leak in the basement will feel much less stressful knowing the monetary aspect of it is taken care of.

3. Determine disposable income

Extra and hidden costs that come with homeownership can affect how much money is left over each month after all bills are paid.

This may mean having less disposable income. Be sure to assess and differentiate your wants and needs on a monthly basis so you can adjust your overall spending plan accordingly.

If, however, you find you have more disposable income, think of reallocating some of it towards that emergency fund or putting it towards home maintenance savings.

4. Regularly check in

You can spend a lot of time setting forth a budget, but if you aren’t actually sticking to it what’s the point?

Review your home’s budget and expenses at least four times a year. This can bring to light how utility costs are affected seasonally, where you may have unnecessary spending, or where you might be able to consolidate payments.

This will also help monitor your savings accrual. Regular reviews will aid in avoiding overspending and taking on debt.

5. Don’t throw it all away on housewares

Buying a new home is exciting. It’s a fresh start and a clean slate – and this includes d├ęcor, both in and outside of the home.

New homeowners may feel inclined to purchase things like furniture, decorations, and other housewares as a way to further personalize their new abode.

They may have also just discarded a lot of items in the packing process, trying to streamline what needed to be boxed up and oved.

While there’s nothing wrong with wanting new things for your new digs, be aware that these costs can add up quickly. You don’t have to buy all items brand new. Check out thrift shops, sales, and even free items friends offer up to furnish your new place.

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