5 budgeting tips for new homeowners

mm Paul Verbiton July 23, 2020
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Picture this: you’ve been house-hunting for months and finally found your dream home. Better yet, you’ve just received a pre-approval letter from a mortgage lender, and you’re ready to make that oh-so expensive purchase. What’s next? Budgeting. The B-word is one you’ll be thinking about a lot in the coming months as a new homeowner. Owning a house gives you a level of freedom unknown to renters – you can paint and decorate as you want, or take care of an exotic pet. But this freedom will be lost if you find yourself with money troubles. That’s why it’s important to budget for all the fees that possessing property incurs.

1. Seek a roommate for extra rooms

Living on your own might be your dream, but the steep cost of your mortgage may make the idea of a roommate more appealing. To help cover some of your new expenses, consider getting a housemate who will pay you rent. Alternatively, you can list your home on Airbnb to provide a bed for travelers. If you don’t have extra space, but you do have extra time, try to get into a side hobby that can supplement your income. Now might be the time to start composing a catchy tune, writing the book you’ve always dreamed of, or painting a masterpiece. Look for ads online that relate to your skills to earn cash during your spare time. Whether it’s getting a roommate or bolstering your side hustle, those extra bucks will come in handy when it’s time to pay your bills.

2. Calculate all your new expenses

If you have been renting for some time, you might be unaware of some extra fees that come with owning a home. These include utilities, mortgage payments, insurance, property taxes, maintenance, repair bills, and remodeling costs. You want to have a clear idea of these obligations before you purchase a home, otherwise, you’ll be in for a nasty surprise when it’s time to pay your bills. Creating a feasible budget requires an understanding of how to budget properly. Crafting a financial plan takes more than scribbling down rough estimates. It has to be a feasible outline that you can stick to; otherwise, it will fail within the first month. A budget requires you to manage your money realistically. That means identifying your bad spending habits and finding areas where you could be saving instead of spending. The answer is different for everyone: where do you overspend? And why do you overspend? For your budget to work, you have to answer both of those questions. Owning a home means paying more than you might have expected – be prepared for these surprises by setting up a realistic budget that factors in for all these costs.

3. Stretch your dollar as far as it will go

Look for cost-effective solutions to common problems, such as decorating. It can be overwhelming to see all that blank space and try to devise ways of personalizing it. After all, you want to make your new house feel like a home, but without spending a fortune in the process. Creative, DIY decorations can help you save money while sprucing up your space. Whenever possible, shop for used items. Ask friends and family if they have any extra furniture or paintings that they’re giving away. Thrift stores and craft shops have supplies that you can repurpose to make into unique decorations. Cutting corners on expenses like these is a great way to save cash without having to compromise quality – all it takes is a little elbow grease to make a unique piece for your home.

4. Set aside an emergency fund for repairs

Accidents happen. Even in a new home, appliance breakdowns are inevitable. But you don’t have to let repair bills break your bank. Set aside a rainy day fund for repairs and replacements of your most important appliances. Try to repair broken utilities as soon as possible, since leaving them to sit can cause further damage. When it comes to fixing water problems, follow these helpful tips for choosing plumbers. Don’t risk it when it comes to repair people – do your research online to make sure that you’re hiring a credible and reliable company. Or, you can ask your friends and family members about their experience with repair businesses in the area. Hiring licensed and insured professionals will reassure you that they can perform quality work, even if it comes at a higher price. A discounted rate from a plumber without certifications can lead to another repair bill in a few weeks.

5. Prioritize your mortgage

Missing payments can lead to serious penalties, such as a declining credit score, or in the worst case, a foreclosure. This will result in you losing rights to your property. Making your mortgage payments may be the single most important budgeting tip for new homeowners – otherwise, you may lose your property altogether.

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Paul Verbiton

I enjoy spotting opportunities and doing my best to grab them if I can. I am eager to see the world, I love taking photos and writing, coming up with topics that are pleasant to read, funny, and interesting at the same time.

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