As a first-time homeowner, you might believe that the hard work is behind you after you’ve found and purchased a home. You had to determine how much you could afford, secure a down payment, and apply for a mortgage.
However, the hard work involved with financial planning and budgeting is just beginning. To keep the momentum going and build a firm foundation for your future, follow these four budgeting tips.
Evaluate changes to monthly expenses. Your living expenses might increase because you’ll be paying more for utilities, the mortgage, and insurance. You’ll also be responsible for maintenance and repair issues that arise.
Change your emergency fund. Experts recommend that first-time homeowners increase the amount in their emergency savings. Aim for at least three to six months’ worth of living expenses to cover unexpected expenses.
Save for home maintenance. Depending on your location as well as the size, condition, and age of your new home, your home maintenance expenses will vary. Aim to set aside about 1% of the home price for maintenance.
Review your retirement plan. You don’t want to neglect your other financial goals once you purchase a new home. If you have a 401(k), check your contribution rate to your employer’s plan. Determine if you need to increase or decrease your contribution amount.
Purchasing a home creates new financial responsibilities, but with the proper preparations, you can be financially ready. Make budgeting a priority to track where the money goes and not fall into debt.
Sources: Thebalancemoney.com, Investopedia.com, Hrblock.com
We are ready to help you find the best possible mortgage solution for your situation. Contact Sheila Siegel at Synergy Financial Group today.
