Buying a new home is one of the most exciting and stressful times in a person’s life. Financially, though, it’s more on the stressful side. After all, you have just spent a lot of money on a down payment and possibly new furniture. The chances are, your bank balance isn’t looking as healthy as it was before! To help you get back on track, use these financial tips for new homeowners.
Assess Your Budget
The budget you worked with before you owned your current home isn’t going to work anymore. Now, your payments have completely changed – you’ll be paying off a mortgage, your grocery stores may have different prices, and your bills will have changed. As soon as possible, then, you must assess your budget to see how much you need to pay for everything each month. If you have some refurbishing you want to do during the first year of new ownership, you may need to get used to a tighter budget. It’ll be worth it in the end!
Update Life Insurance
One responsibility after purchasing a property is updating your life insurance. After all, your entire finances have changed! If you want a more affordable option, consider term life insurance. Those policies tend to be more affordable compared to permanent policies, so you could decide on a term that covers your mortgage payments. For example, if you have a twenty-year mortgage payment, you could choose a fixed twenty-year life insurance term.
Build an Emergency Fund
You might not have a lot of money to spare as a new homeowner, but it’s still important to have some emergency cash, just in case. Living in a new home, you don’t know what might happen – what if the pipes burst? What if you discover an infestation? What if the area is prone to flooding? While, hopefully, these situations won’t happen, it’s better to be financially prepared, so start building an emergency fund. Even putting a little amount into savings each month is better than nothing at all!
Avoid Overspending in the First Year
During your first year, you might be tempted to spend lots of your hard-earned cash on furnishings as you want to get your new home as perfect as possible. You should try to avoid going overboard, though. While that beautiful wooden dining table might fit perfectly in your open-plan kitchen, do you really have the money to afford it? You likely have many years inside this property, so you don’t need to rush buying expensive furniture – be a little more frugal in your first year.
Get To Know Your New Utility Bill Prices
You will know your old utility bill prices like the back of your hand, but what about in your new home? To budget enough for them each month, pay attention to how they fluctuate depending on how much energy, gas, and water you use. That way, you’ll avoid any nasty (and expensive) surprises.
Enjoying your new home is important, but your finances also need attention. By using these tips, your first year as a new homeowner will go much smoother.
