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Five Top Financial Tips for New Homeowners

After years of planning, budgeting and saving, you finally purchase your dream home! Just when you thought you’ve finally ‘arrived’, you realize that buying a home is not the end, but the actual beginning where all your financial expenses start adding up. You will need to buy home appliances, furniture and bedding etc. You will also need landscaping services to beautify your front and back yards. Suddenly, you realize that there are a lot of things that you need in order to keep your home functioning.

Here are a few tips that will ensure that you do not go overboard with your expenses. These essential financial tips will help you be more careful with your spending and help you find a way to live within your means.

#1. Plan your purchases carefully
Owning a home is not child’s play. There are a number of thing that need to be accounted for – financially. Furniture, artwork, lighting, appliances – all are pricy and need a lot of money to be spent. It’s very easy to get carried away. It is hence important to create a strategic plan for all the purchases you make. Instead of impulse shopping that could max out your credit card, save up for the important and absolutely necessary things you want to buy. Make sure that you spread out your purchases so that you do not end up spending a lot of money at once.

#2. Learn the art of budgeting
While you might have a sort of budget in place, the first few months in a new home are always nerve wracking. It’s a good idea to revisit your numbers and prioritize and adjust the budget accordingly. Mortgages are generally more expensive than rent payments and you feel a dearth of cash inflow. Keep an eye on all the expenses that you can avoid and allocate appropriate amounts for those expenses that you cannot avoid.

#3. Major annual expenses need to be accounted for
With a new home, a lot of recurring costs add up on a monthly or yearly basis. Annual property tax, home owner’s association dues and other similar expenses are common. Take all these expenses into account while assigning budgets for your new home.

#4. Inevitable repairs and maintenances
It’s important to save some money for repairs or maintenance. Sometimes insurance covers these costs, but many times it does not. Check your insurance to understand what you can and cannot claim. If you purchased an old home, repairing budget might need to be higher. Run a thorough check of the entire house before you allocate budgets.

#5. Emergency funds
However well you plan, emergencies always come unannounced. It’s always a good idea to keep aside an emergency fund. You never know when you might need extra money. Make sure that you have something to fall back on.

If you thought that the down payment you made was all that you needed to pay when buying a new house, think twice – there are a lot of hidden costs involved. Ensure that you budget your expenses carefully.

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