Congratulations on buying your first home. Your work, however, is not finished yet. Although you have just completed the massive process of purchasing your new home, there are still a few things you need to take care of with your finances. As soon as you’ve bought a house, it’s time to take a look at what to do next. When it comes to entering your new home and making your new house your home, it’s important to follow the following twelve steps in order to set you up for success.
Set a Budget and Stick to It
One of the most important things that first-time homebuyers can do is create a budget and stick to it. This will help them stay organized and aware of how much money they are spending on groceries, personal care items, transportation, etc. It’s also important to remember that costs tend to go up over time, so make sure that you don’t go nuts buying new appliances or furniture right away.
Don’t Get Into New Debts
It’s important to remember that you should not start new debts right after purchasing your new home. This means that you shouldn’t take out a loan to buy a new car or start a massive spending spree on extravagant items. A large mortgage payment can quickly add up and put a strain on your finances. Stick to a manageable debt load and focus on paying off your mortgage as quickly as possible to avoid future financial strains.
Set Aside Money to Make Repairs
The moment you walk into your new home, it’s important to have money saved up to cover any repairs you may need. Whether it’s fixing a broken window or repairing a water leak, it’s important to budget for these small expenses. If you’re not prepared for these costs, they could quickly add up and put a damper on your new home ownership experience.
Be Prepared for Bigger Emergencies
While small repairs are important, they’re not the only emergencies you’ll face as a first-time homeowner. Big problems like a broken pipe can happen at any time and without warning, so it’s important to be prepared for them. Make a list of the emergency numbers for your neighborhood, and have the numbers stored in an easily accessible place like your smartphone. This will help you get help fast when an emergency arises.
Get Set Up for Utilities
Once you’ve moved in, one of the first things you’ll want to do is get set up for utilities such as electricity, water, and trash pickup. Make sure that you have an accurate estimate of your monthly utility bills so that you can plan ahead and save money on this expense. It’s also helpful to have a forwarding address for your utilities in case something happens and you can’t reach your regular address.
Start Saving for Taxes
When buying a home, one of the biggest expenses is taxes. Make sure that you are prepared for this cost by starting early on and setting aside money each month for taxes. This will help reduce the stress associated with preparing tax returns during year-end when taxes are due.
Be Prepared for Changes
One thing that often happens after someone buys their first home is that they start making changes that they never thought possible in their previous living arrangement such as adding an extra bedroom or putting in an outdoor space. It’s important not only to budget for these changes but also to make sure that you consult with an expert before making any major alterations or upgrades in order to avoid any costly mistakes down the road.
Get a Home Buyer’s Insurance Policy
Many first-time homebuyers don’t realize that they need to get a home buyer’s insurance policy in order to protect their interests in the event that something happens to their new home. This policy can help cover things like loss of consortium, personal property damage, and even wrongful death.
Before you get a home buyer’s insurance policy, make sure to consult with an expert who can give you the financial tips you need to make the process as smooth and stress-free as possible.
Avoid chasing refinancing opportunities early
Many people immediately go after refinancing opportunities after buying their first home, but this can actually be a mistake. By waiting a few months, you can more easily compare different mortgage options and get a better deal. Plus, refinancing may not be the best solution if you have serious financial problems or if there are other issues with your home that need to be fixed.
Switch to cash instead of credit cards
Recent research indicates that people who use credit cards spend more than those who use cash. To avoid getting tempted, it may be wise to withdraw a certain amount of cash from the ATM before going to the store so you will only have enough money to purchase essential items.
Save a few dollars each week to cover your bills, gas, and coffee costs. Give yourself $10 to spend each week on anything you want—but only after you’ve saved up enough money in your cash budget for the following week. If you find yourself using your credit card too often, this might be a good way to curb your spending habits.
There’s no need to overspend on your new home just because you’re excited about it. Stick to a budget and don’t go overboard on decorating or buying large appliances that you may not use. This way, you can enjoy your new home without feeling like you’re constantly strapped for cash.
Keep retirement in mind after buying your first home
Once you buy your first home, you may be tempted to put all of your retirement savings into the purchase. This can be a mistake. Make sure to continue saving for retirement even after you have bought your home – your money will be safer and you’ll get a better return on your investment this way.
These financial tips were written with the goal of helping first-time homeowners save money on their home purchases, but remember that it may take some patience to see results. Don’t expect to be able to fix every little thing right away or to see large sums of money saved in short order – it can take months or even years for many improvements to pay off. But by following these tips, you’ll be on the right track and making smart choices about your new home ownership journey.