Budgeting for the cost of home ownership isn’t always top of mind when buyers are eager to get into their new home. After investing time and energy in finding the right house at the right price, it can be shocking to realize all the things one can spend money on after final closing signatures. Like the need for new furniture and appliances or the cost of a handful of repairs. Don’t be a buyer who wastes a significant amount of money for the sake of convenience or because you didn’t know better. Consider these tips to help save big money over the first year and beyond in your new home.
Do it yourself on easy fixes. If you’ve never been handy around the house, you’re probably quick to call someone else for home repair. Be prepared to pay someone $50 or more an hour on even the easy stuff. Now that you’re a home owner, it’s a great time to learn how to fix a few things on your own. Leaky toilets, a loose shelf, or a hole in the drywall are examples of things that you can try to tackle yourself before calling on someone for a simple repair. There are tons of DIY articles online as well as YouTube tutorials.
Pass on the extended warranties for major appliances. Consumer Reports (August 26, 2016) concluded that most extended warranties on appliances aren’t worth the expense. By the time an appliance fails, it’s likely time to get a new one anyway. Save the money for the actual repair, if it’s ever needed.
Furnish your home slowly or buy low-end items for temporary space fillers. Many buyers move into a larger space than they previously had and they don’t like seeing unfilled space. So what do they do? They drop a lot of cash or max their credit on furniture. If you have a lot of expenses, why the rush to get all your furniture at once? Slowly fill the space based on what you really need and what makes most sense for your monthly budget. Give yourself time to adapt to your new space and assess both décor and practicality. If you can’t stand too much empty space, buy lower-end stylish items to serve as temporary fillers.
Switch to LED bulbs as the old ones burn out, not all at once. Incandescent bulbs are definitely cheaper, but they cost you more on your energy bill. LED bulbs are more efficient and you recoup your cost within a year’s time. But they’re more expensive, so don’t buy them all at once. Simply replace as needed to stagger your cost over a longer period.
Throw out, donate, or sell items rather than paying for storage. The average cost of storage units are $50 to $300 a month. It’s time to do some serious trashing or donating if you’re paying to store things you can’t fit in your home. There are plenty of reasons people have for needing temporary storage space. But chance are you can probably pare down what you need to fit the space you live in. If the thought of organizing a large mess of items overwhelms you, hire an independent home organizer to help you get it done. You might even be able to make a bit of money selling items through consignment or online.
Get rid of PMI as soon as you can. If you couldn’t put down at least 20 percent as a down payment for your new home, you’re likely paying private mortgage insurance (PMI). The first couple years of holding a mortgage with PMI are the best years to make extra payments. You’ll get rid of the PMI faster and reduce the lifetime interest you pay on your mortgage.
Shop around for better insurance. In the rush to get your home, you may have called one recommended insurance company without any comparison to others’ rates. Companies can vary as much as around 30 percent in insurance premiums for similar coverage, so take the time to shop around now and see if you can get a lower premium.
You’re investing a lot in owning a home, so take smart steps to reduce your expenses. The sooner you start, the more money you’ll save.