Congratulations on buying your first home. Your work, however, is not finished yet. Although you have just completed the massive process of purchasing your new home, there are still a few things you need to take care of with your finances. As soon as you’ve bought a house, it’s time to take a look at what to do next. When it comes to entering your new home and making your new house your home, it’s important to follow the following twelve steps to set you up for success.
Set a Budget and Stick to It
One of the most important things that first-time homebuyers can do is create a budget and stick to it. This will help you stay organized and aware of how much money they are spending on groceries, personal care items, transportation, etc.
Keep in mind that costs typically increase over time. Avoid going overboard with purchasing new appliances or furniture immediately.
Don’t Get Into New Debts
It’s important to remember that you should not start new debts right after purchasing your new home. This means that you shouldn’t take out a loan to buy a new car or start a massive spending spree on extravagant items.
A large mortgage payment can quickly add up and put a strain on your finances. Stick to a manageable debt load and focus on paying off your mortgage as quickly as possible to avoid future financial strains.
Set Aside Money to Make Repairs
The moment you walk into your new home, it’s important to have money saved up to cover any repairs you may need. Whether it’s fixing a broken window or repairing a water leak, it’s important to budget for these small expenses.
If you’re not prepared for these costs, they could quickly add up and put a damper on your new homeownership experience.
Be Prepared for Bigger Emergencies
While small repairs are important, they’re not the only emergencies you’ll face as a first-time homeowner. Big problems like a broken pipe can happen at any time and without warning, so it’s important to be prepared for them.
Make a list of the emergency numbers in your neighborhood, and have the numbers stored in an easily accessible place like your smartphone. This will help you get help fast when an emergency arises.
Get Set Up for Utilities
Once you’ve moved in, one of the first things you’ll want to do is get set up for utilities such as electricity, water, and trash pickup.
Make sure that you have an accurate estimate of your monthly utility bills so that you can plan ahead and save money on this expense.
It’s also helpful to have a forwarding address for your utilities in case something happens and you can’t reach your regular address.
Start Saving for Taxes
When buying a home, one of the biggest expenses is taxes. Make sure that you are prepared for this cost by starting early on and setting aside money each month for taxes.
This will help reduce the stress associated with preparing tax returns during year-end when taxes are due.
Be Prepared for Changes
After acquiring their first home, people often unleash their creativity and embark on home improvement projects that were previously unimaginable, like adding an extra bedroom or creating an inviting outdoor area.
To prevent expensive mistakes in the future, it is crucial to not only allocate funds for these modifications but also to seek guidance from a professional before making significant changes or improvements.
Get a Home Buyer’s Insurance Policy
First-time homebuyers need to understand that getting a home buyer's insurance policy is crucial to safeguarding their interests in case of any unexpected incidents that could damage their newly acquired property.
This policy can help cover things like loss of consortium, personal property damage, and even wrongful death.
Before purchasing a homeowner's insurance policy, it's essential to speak with a professional who can provide you with valuable financial advice to ensure the process is easy and hassle-free.
Avoid chasing refinancing opportunities early.
Many people immediately go for refinancing opportunities after buying their first home, but this can be a mistake. By waiting a few months, you can more easily compare different mortgage options and get a better deal.
Plus, refinancing may not be the best solution if you have serious financial problems or if other issues with your home need to be fixed.
Switch to cash instead of credit cards
Recent research indicates that people who use credit cards spend more than those who use cash. To avoid getting tempted, it may be wise to withdraw a certain amount of cash from the ATM before going to the store, so you will only have enough money to purchase essential items.
Save a few dollars each week to cover your bills, gas, and coffee costs. Give yourself $10 to spend each week on anything you want—but only after you’ve saved up enough money in your cash budget for the following week. If you find yourself using your credit card too often, this might be a good way to curb your spending habits.
There’s no need to overspend on your new home just because you’re excited about it. Stick to a budget and don’t go overboard on decorating or buying large appliances that you may not use.
This way, you can enjoy your new home without feeling like you’re constantly strapped for cash.
Keep retirement in mind after buying your first home
Once you buy your first home, you may be tempted to put all of your retirement savings into the purchase. This can be a mistake. It's crucial to keep saving money for retirement even if you've already purchased a home. This approach will not only provide greater security for your funds, but it will also deliver a more significant return on investment.
By following these financial tips, first-time homeowners can save money on their home purchases. However, it's important to keep in mind that it may require some patience to see tangible results. Don’t expect to be able to fix every little thing right away or to see large sums of money saved in short order – it can take months or even years for many improvements to pay off. But by following these tips, you’ll be on the right track and making smart choices about your new homeownership journey.