Based on recent statistics, over 60% of Americans are homeowners. This is because families and/or couples prefer purchasing a home over renting. After all, for a lot of people, having their own home is the fulfillment of their American dream. However, purchasing your own home is one of the major financial decisions you can make within your lifetime.
The idea of buying a home comes with a trail of questions. Do I really need to buy my own home? Can I afford it? Will I be able to sustain this home long enough to benefit from purchasing it? Keep in mind that buying a home is a huge financial move and a major responsibility.
If you happen to be a new homeowner, you may have already realized that making the down payment was the biggest financial challenge. And by this time, you may have also already encountered the countless expenses associated with owning your own home.
Here are some pointers on how you can handle these financial hurdles;
Manage your budget in advance
Paying for the monthly mortgage of your home is far more different than paying for a monthly rent. This means that you would need to adjust your budget significantly to accommodate your increased expenses. There are also a lot of things that you need to anticipate like higher utility bills and other maintenance costs such as homeowners’ association fees and lawn service.
Given this situation, it is important that you learn how to manage your budget well. For example, to accommodate the cost of having your own home, you might need to cut down on flexible expense categories such as shopping, travel, and leisure in order to compensate.
Focus on your necessities
We know that having a new home can be very exciting and the idea of shopping for pretty stuff is just hard to resist. Before you splurge on home decorations, furniture, and appliances, create a practical shopping list that’s based on your needs. Start by making an assessment of the things that you need in order to become comfortable in your homes such as cookware, beddings, and toiletries.
Carefully plan a shopping system that involves a “wants versus needs” principle. From here, you would be able to identify the items that you need to buy immediately versus the ones that would have to wait for now. Just take it easy. You can gradually complete your home so there’s no rush in buying everything you want all at once.
Create a separate budget for maintenance
If you own a home, unexpected expenses are bound to arise at any time. Homeowners spend an average of about $2000 each year just for home maintenance. This does not include home remodeling and other upgrades. This figure mainly constitutes expenses like lawn maintenance, pest control, and minor home services.
So if you’re a new homeowner, spending thousands of dollars every year for maintenance services may come as a shock. It will definitely take a toll on your budget. Thus, it is important to pay attention to this aspect by setting aside some extra money every month dedicated to these expenses. Save as much as you can, whenever you can, to avoid getting overwhelmed and to keep your budget right on track.
Pay your home mortgage on time
Paying your mortgage in a timely manner can create a whole lot of difference in your budget. This is the best thing you could do to maintain your home. In some states, home lenders can immediately foreclose your home after missing just two months’ worth of payment.
This can also ultimately damage your credit standing. So make a commitment to pay your home mortgage right on time or even in advance. You can do this by planning ahead and by managing your priorities well.
Get properly insured
Mortgage lenders require homeowners to purchase property insurance and to purchase enough that can completely replace the property in case of a total loss. However, this is not the only insurance coverage you will need as a homeowner.
If you are sharing your home with someone who is dependent on your income to pay for the mortgage, you are required to have life insurance with that person indicated as the beneficiary. In this case, they will not lose the home in case you fall into sudden death.
In addition to that, you might also want to consider having disability-income insurance so can have an alternative source of income in the event that you’ll suffer from a disability and become unfit for employment.