Here are surefire tips to help new homeowners save money and enjoy their new house!
You’ve just completed the purchase of your first house. Without question, this is probably the biggest investment you’ve ever made. By now, you’re probably thinking of all the projects and new responsibilities that come with homeownership.
Owning a house can be costly. So, it’s important to think hard and develop a budget strategy that would help improve your financial situation. Luckily, there are various ways to cut costs and make homeownership more affordable.
Importance of Saving Money For New Homeowners
The first few months would be the ideal opportunity to save money. Investing in worthwhile upgrades can help in saving you more expenses in the future by preventing any huge repairs that would usually cost thousands of dollars.
As a new homeowner, it’s crucial to track your budget on a monthly basis. It would help you gain financial freedom and, at the same time, teach you to prioritize. There are various ways to save money, and that includes lowering your utility bills, refinancing your mortgage, and many more.
Below are just some of the money-saving tips for new homeowners.
Consider Lowering Your New Insurance Premiums
Some homeowners may be able to save money on their monthly mortgage payments by lowering their homeowners’ insurance premiums. You can decrease your premium payment by comparing insurance quotes from at least three companies. Conduct thorough research on which insurer can cover your needs for less. You should be able to save some money on your home insurance if you buy it from the same insurance carrier that covers your car. This is referred to as “bundling” by insurers.
Lastly, don’t hesitate to ask for discounts. You might secure a discount from an insurer if you opt to stay with them for a number of years.
Check your utility bills and usage
As a new homeowner, you will be in charge of paying for your own utility bills. Budgeting for this expense ahead of time will help you avoid any unexpected bills later on.
If you’re not at home or on vacation, you can try turning down the heat on your water heater. However, there are even better ways to save electricity, and one of them is to invest in a smart power strip. Electronics are known to consume power even when they are turned off or in sleep mode. A smart power trip can detect if an appliance is not in use and cut off its power supply.
Also, consider purchasing energy-efficient appliances. You can check out appliances that have the Department of Energy’s star certification. For example, an energy-certified washing machine would consume 25% less power than the regular one.
Check Your Tax Benefits
Some may overlook or be unaware of the tax advantages of owning a property.
One of these would be a mortgage interest tax deduction. By itemizing the deductions on your federal tax return, you can immediately deduct the annual interest you pay on your mortgage. The amount of your mortgage and when you acquired your property would determine your eligibility for the deduction.
You may also be allowed to deduct state and local property taxes paid on your home on your federal tax return. Installing a residential solar energy system would also qualify you for the tax credit.
Save for your emergency fund
One of the challenges of being a new homeowner is home maintenance. This added load can become a problem if not addressed early on. As the years go by, you will be met with unforeseen repairs that can cost a fortune.
The challenge is here is to ensure that you’re ready budget-wise. Start preparing for these future projects by setting aside a little amount of money for your emergency repair fund. Ultimately, this will help you manage all the repairs needed without going into debt.
An emergency fund can keep you afloat even if you have ongoing repairs. You can set aside as little or as much amount as you like on a weekly or monthly basis.
Refinancing your mortgage entails taking out a new loan to pay off your old one. By extending the repayment period, you may be able to lower your mortgage interest rate or lower your monthly payment. You can also refinance to eliminate the mortgage insurance requirement or convert your adjustable-rate loan to a fixed-rate loan.
At the end of the day, ensure to run the numbers and check out if you’ll save enough on your monthly payments to cover the refinancing fees in the coming years. If you do decide to refinance, make sure to look around for the best rates, terms, and customer service.
Being a new homeowner is truly exciting and fulfilling. But this journey can also be expensive. With that, it’s important to keep the right mindset and budget your expenses carefully. There are a lot of available resources online that can keep your financial house in check. Do your research, and don’t be afraid to ask experts for advice.
If you need more information or consider buying new home insurance, then message us today or get quote here!