The purchase of a new home has hidden costs that may surprise you. You should plan on spending extra money for fees that you didn’t have to worry about when renting, such as condominium fees, or maintenance costs on your home.
Budget: The best way to start a budget is to write your income down, subtract your mortgage payment, and figure out how you plan to spend the rest by prioritizing their importance. If you have money left over after you have paid monthly bills, it is important to build up a savings of six months of mortgage payments for emergencies.
Maintenance: Something is always breaking in your new house whether it’s the garbage disposal, toilet, or backed-up plumbing, there will always be maintenance work. The most cost effective way to handle these is to become a plumber or handy-man. Most plumbers will charge you fifty dollars just to come to your house after-hours. Other problems such as electric shortages require an expert, so plan to save some money for these emergencies.
Landscaping: Maybe you would rather be lounging at the beach or pool, but the cheapest way to keep up with the yard work is to buy a lawn mower and hedge clippers and spend some time in the great outdoors of your yard. Otherwise, plan for someone to do it for you. Ask neighbors and friends for references.
Association Dues: Many neighborhoods and condominiums have community pools, parks, or fitness rooms requiring upkeep, and a monthly fee. Find out how these fees are to be paid, and if you have an option to opt out. If you do, it would save you some money, but more likely, these fees are non-negotiable so plan them into your budget.
Remodeling: If you bought your home with the dream of fixing it up, make sure that you invest time in planning out the project. Begin with a budget for the project and keep track of all expenses. Revise the plan if it goes over budget. You may have to remodel one room at a time to keep within your budget.
Delay other purchases: Do not purchase any other major items such as a new car while you are getting adjusted to your new lifestyle as a homeowner. There will be unexpected costs, so you want to have a cushion in your budget. If you need furniture, look on the internet for furniture sales in your area such as Craigslist, or in your local newspaper.
Owning a new home is a major achievement in your life, and an investment into your future. To be successful you must plan for it. With planning, you will avoid over-extending yourself, which could lead to a bank foreclosure. Stay on budget, and over time you will build equity into the property, making it not only home but a financial investment too.