Building a Budget for Homeownership
The financial responsibilities of homeownership go beyond saving for a down payment and qualifying for a mortgage. They also require being prepared for the ongoing, and sometimes unexpected, costs that can result from owning a home.
While most buyers realize the importance of budgeting for the purchase of a home, they can overlook the ongoing commitment necessary to maintain a new property and their financial stability. If you’re a new or soon-to-be homeowner, consider these strategies to help prioritize your expenses for the long term.
No one knows exactly what the future holds, so once you commit to a mortgage it’s even more important to prepare for the unknown. While your loan payment may be consistent, some parts of your monthly obligation can change from year to year. Insurance premiums and property taxes often increase over time so it’s best not to stretch your money so thin that you won’t be able to make adjustments.
Home repairs and maintenance are also expenses that are hard to predict with accuracy. Before you invest in projects that improve how your house looks, be sure its major systems — plumbing, roof, HVAC, foundation, etc. —are functioning properly and can be reasonably expected to continue performing well. Those types of repairs may not be able to wait while you replenish savings.
Hunt for Savings
One way to make your dollars go farther is to be proactive about savings. Compare prices whenever possible. Don’t renew your home or auto insurance policies without shopping around. Get multiple estimates, and references, from different service providers before choosing one.
Taking on a do-it-yourself attitude can also result in savings. The wealth of instructional videos and how-tos online make many home improvement projects much easier for novices. Buying lawn equipment to maintain your own yard can pay for itself rather quickly. Even using your new kitchen to cook more and eat out less can be a significant boost for your budget.
Of course, the most critical aspect of keeping your budget balanced as a homeowner is staying accountable to your plan. Write down what you plan to spend in each category and document your progress remaining on track. This makes it easier to spot the areas where you are struggling and where you might be able to shift priorities.
Learn more about making homeownership the first step toward a stable financial future on our website. Our experts are waiting to discuss your mortgage options and answer your questions, so call today.