5 Money-Saving Tips for New Homeowners

| September 10, 2019 | Comments (0)

If you’ve just purchased your first home, or are preparing to make that purchase, congratulations! You’re on track for a lifetime of long-lasting financial stability that can often come with homeownership. In addition, you’re purchasing an investment that will eventually become one of your most valuable assets. 

 

But just because homeownership can come with lots of financial benefits, this doesn’t mean you shouldn’t prepare for financial difficulties that may arise. As a new homeowner, you might overlook a lot of these expenses at first, which can range from simple home repairs to large renovations and fixes. However, these are costs that will almost certainly come up at some point when you own a home, and you should be ready for them, as failure to prepare could lead to long-term financial difficulty, and make owning a house go from a great financial decision to a poor one.

 

The best way to be ready for these unexpected costs that can arise is by saving money. However, with bills from mortgages and other expenses, it can be difficult to know how to get started. Here are five tips on how to save money if you’re a new homeowner.

 

Have an Emergency Fund Ready for Home Repairs

An emergency fund is a portion of money set aside for an emergency situation, such as job loss or car repairs. An emergency fund can range from $2000 to $10,000 depending on your expenses. While many Americans know the importance of emergency funds, there’s still a lot of people who have yet to allocate a small amount of savings to one.  

 

If you don’t have an emergency fund, don’t panic. These days, it’s pretty easy to start one—especially with the internet. Consider signing up for an online bank account that is separate from your traditional bank. By creating a separate account online, you won’t be as tempted to dip into your savings for non-emergencies. Choose a bank with auto-savings features so you can quickly reach your goals on a schedule that fits your lifestyle.

 

On top of your regular emergency fund, you should also have a fund set aside for home maintenance and repairs. This type of savings is sometimes referred to as a sinking fund, meaning it is money set aside for expected future expenses. Having money prepared for small fixes such as a leaky drain, all the way to larger expenses such as new roofing, will allow you to avoid taking out loans or spending your hard-earned income on home repairs. Instead, you will be able to utilize the funds that you have set aside in an emergency fund and not have to reach into your bank account.

 

Use Your New Kitchen and Cook from Home

Next to home costs, food can be one of the biggest expenses Americans have to deal with in their lives. After all, everyone needs to eat! One of the ways that food expenses are so high for many Americans is because eating out at restaurants and fast-food chains are starting to become part of people’s daily routine more and more. While groceries aren’t cheap, eating out is even more expensive, and many spend far more cash than they need to by not making food at home.

 

Now that you have a home with a fully functional kitchen, you should put that to best use and start preparing meals from home every day. The more you do this, the less you’re going to need to go out to eat. Not only can you make your dinners at home, but you can also start preparing lunches for work every day. That doesn’t mean you need to make a cold turkey sandwich for yourself day after day either (unless you really like them!). There are lots of great recipe options for meal prepping your lunches available. In order to help mitigate the costs of food even more, consider buying groceries in bulk. While the initial cost is more expensive, buying in bulk allows you to make more meals for yourself at a lower cost. Try buying store brand or generic groceries as well, as these often have a much less hefty price tag than big name-brand foods.

 

Spend More on Long-Lasting Appliances

While being frugal can be a great way to save money, sometimes it’s better to pick a more expensive item for its higher quality and longevity. Home appliances are a great example of this. Microwaves, refrigerators, washers, and dryers are all items that have a vast array of prices; some can be incredibly cheap, while others can be expensive. However, when you start to buy products on the cheaper end, you might also find they come with cheaper quality. Sure, you’ll be saving money in the short term, but when you need to buy a new microwave every year because the lower quality one seems to always fall apart, you’ll quickly see it isn’t as cheap as you anticipated. Take your pick of a higher quality item built to last.

 

Declutter and Organize Your Space

A messy, disorganized house can create a cluttered mind, increasing stress in your day-to-day life. This can make everyday tasks more difficult, and therefore, create the side effect of making money-saving and financial planning more stressful than it needs to be.

 

On top of that, a cluttered house can also cause lost and damaged items, which inevitably leads to needing to make more purchases to replace the objects that were misplaced and broken. A good way to start decluttering is by purchasing some low-cost storage items, such as shelves and drawer organizers. This can keep your home clutter to a minimum and prevent the need for replacement costs

 

Craft a Budget

Finally, one of the best ways to be financially secure as a new homeowner, as well as save more money in the long run, is by creating and sticking to a budget. A budget allows you to track all monthly expenses, including mortgage costs and property taxes, as well as your monthly income, to prevent you from overspending. A good budget can help you see where you’re spending the majority of your money and where you can afford to cut back, allowing you to slowly decrease your spending and help you save and invest more.

 

Overall, homeownership is a great way to start achieving financial independence. While it can come with some expenses, with the right amount of preparation, these can easily be mitigated in order to make your home buying experience as smooth as possible.

Category: Home Maintenance, Housing Market

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