Financial Advice for First-Time Homeowners
Millions of homes are sold each year, with many buyers making this type of investment for the very first time. While there are many things buyers will learn in the first year of homeownership, it’s especially important to go into this new journey with an understanding of finances. Some useful tips for staying on budget and funding large purchases can be found below.
- Save for Repairs
Every home will require repairs each year, no matter how old or new it is. For this reason, it’s crucial to save money for these expenses (both expected and unexpected) each month. In general, it’s recommended to save one percent of your home’s value. However, you may want to save more if your property will require extra repairs due to age or condition.
- Make Maintenance a Priority
Maintenance is one of the best ways to minimize the need for repairs while helping to maintain your home’s value. This should include cleaning the gutters, fixing leaks right away, inspecting the roof, cleaning the pool, and even cleaning out dryer vents. While you may need to hire a professional to do some of these, you should be able to do many maintenance tasks on your own to cut costs.
- Finance New Appliances
Most home improvement stores offer incredible deals on new appliances if you finance through them. This can mean outfitting your home with a reliable fridge, oven, or even new washer/dryer without having to worry about having the cash upfront. However, it’s important to remember to pay monthly kitchen appliances on time in order to improve your credit and pay off the debt as quickly as possible.
- Take DIY Classes
Since home improvement and repairs can be costly, you might want to take a few courses at your local home improvement warehouse. With one of these, you can learn how to change tile, fix a leak, change a filter, and take care of many other small things that you’ll inevitably need to do around the house. You can save thousands of dollars by being able to do these things on your own throughout the time you live in your house.
- Make a Budget
Budgeting is one of the most beneficial things you can do after you buy a home. This will ensure you can save for an emergency fund, pay your utilities on time, cover repairs, and potentially make larger mortgage payments. Being aware of where your money goes each month is the first step in taking control of your finances.
- Don’t Go Overboard
When moving into a new home, it’s easy to want to make updates and buy all-new furniture. However, doing so can deplete your savings and put you at risk of not being able to afford emergency repairs or necessary maintenance. Avoid this by only doing what is right for your budget. Make purchases at the best times and always discuss major improvements before they get started.
- Save for Property Tax
Each year you should expect your property taxes to increase, so make sure you set aside savings for this. It’s also important to save for homeowner’s insurance and always shop around to make sure you’re getting the best price for the coverage you need.
Owning a Home With Confidence
Buying a home for the first time can be scary when you think about how much money is on the line. However, if you go into this investment with knowledge of your budget and a dedication to keeping your home maintained, it can pay off in the future.