Home-buying 101: 5 tips on how to budget after you’ve bought
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Congratulations—the sale is final, the move-in was a breeze… and you even had time to mark your students’ homework.
So now what?
Funny you should ask. Because now that you’ve made the switch from renter to homeowner, you now have a whole new To-Do list—and list of expenses—to look forward to.
This is when the REAL work to balance all of those new demands begins.
Adjusting to mortgage payments, property taxes, and ongoing maintenance can take a bit of getting used to. However, all it takes is sticking to some good habits and before you know it, you’ll be running an efficient and mostly trouble-free household in your sleep.
Here are 5 tips on how to budget after you’ve bought:
Tip #1: Make all of your bill payments promptly.
This is one habit you don’t want to break because delinquency could result in late fees or negatively affect your credit rating (and you definitely DON’T want to be messing with your credit rating in the early days of home ownership—especially if you have a high-ratio mortgage). Setting up automatic deductions from your bank account is the best way to prevent late or missed payments.
Tip #2: Live within your means.
Home ownership includes a number of hidden costs, including property taxes and insurance, as well as maintenance and repair costs. Then you have the typical day-to-day expenses such as food, and gas for your car. So while you might be tempted to go for broke and add a Jacuzzi tub to the master bath and a deck to the backyard—make sure you budget for the essentials first. All of those upgrades can wait until you’re on solid financial ground. Plus sticking to your budget provides the kind of peace of mind that money can’t buy (unless you have a whole lot of it, of course).
Tip #3: Set money aside for emergencies.
Things break. Pipes burst. Dogs dig. Kids like crayons.
Sooner or later your perfect home is going to need a few fixes. Plus as your home ages, major repairs or replacements to the siding, windows, or rooftop will be a reality—and these costs aren’t cheap. Setting up an emergency fund to deal with unexpected issues will keep you from having to max out your credit cards or take out a second mortgage.
Speaking of mortgage, you should also keep at least three months of mortgage payments aside in case of sudden strike action during collective bargaining, or if your spouse/partner loses his/her job or falls ill.
Tip #4: Conduct regular home maintenance.
As the old saying goes, “an ounce of prevention is worth a pound of cure”— and you can bet your bottom dollar this sentiment applies to home maintenance.
Conducting regular maintenance tends to prolong the lifespan of all the moving (and not-so moving) parts of a household. Maintenance can range from simple tasks such as replacing smoke detector batteries, cleaning out gutters, and lubricating door hinges—to major projects like patching up an aging roof, replacing an inefficient water heater, and cleaning a soot-filled chimney.
The more efficiently everything is running, the less likely you’ll have to fork out a ton of money on major repairs.
Tip #5: Keep increasing your financial literacy.
You are an education member after all. Learning is part and parcel of what you do. That’s where Educators Financial Group can provide you with the financial literacy resources to help you better manage your household finances so you’re free to pursue whatever other financial dreams and goals you may have on the horizon.
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Plus be sure to check out The Learning Centre for even more resources.
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