Skip to Content

In addition to a monthly mortgage payment, owning your own home involves a number of additional costs and expenses you need to plan for in your budget. Some of them will be recurring expenses, others you won’t see coming – but you’ll need to be prepared for them nonetheless.

Recurring Expenses

Utilities

If you’re moving into a larger space than you’re used to, remember it means your utility bills will be larger as well, particularly the heating and cooling costs. If your utility company offers it, consider going on a plan that “equalizes” your bills over the course of the year so you’re always paying close to the same amount. It will make budgeting for utility expenses much easier.

HOA

If you live in a neighborhood with a homeowner’s association, there will be monthly or annual HOA membership fees. There may also be fines assessed if you violate HOA rules, so be sure to learn what they are and stick to them to avoid paying the price.

Homeowners Insurance

Homeowners insurance protects your home, its contents, and other assets in case of fire, theft, accident or other disaster (certain geographical areas may require additional coverage for events such as floods or earthquakes).

Your homeowners insurance should cover the cost of rebuilding and refurnishing your home. Most policies allow you to pay annually or month-to-month. You may be able to save a bit by paying for a full year up-front. Plus, you won’t run the risk of coverage lapsing due to a missed monthly premium payment.

Property Taxes

If it’s not already included in your house payment, you will receive an annual bill for property tax, which is determined by the county in which you live, and based on the assessed value of your home. It’s a good idea to save a little bit throughout the year to go toward your property taxes, so you don’t have to come up with the full amount all at once.

Long-Term Expenses

Routine Maintenance and Repairs

Every homeowner must plan to perform routine repairs and maintenance. These expenses increase as homes age, but even new homes require regular upkeep to ensure they increase in value over time. In fact, neglecting basic home repair and maintenance can actually cause homes to decrease in value.

On average, homeowners spend one to four percent of the total value of their homes on maintenance and repair each year. Some years you’ll spend more, some less, but you’ll always spend something.

We recommend setting up a savings account devoted to home maintenance and contributing to it regularly to ensure you have the funds ready when you need them.

Emergency Repairs

In addition to routine maintenance, every homeowner will eventually face a major repair or replacement, such as an air conditioning unit or hot water heater. This is when having emergency savings ready comes in really handy.

We recommend establishing an emergency savings account (separate from the home maintenance account) that’s strictly reserved for catastrophic events, including major home repairs. By having emergency savings as a safety net, you can avoid going into debt by having to charge a big-ticket item.

Related Posts

5 Ways to Save on Groceries This Year

Cutting food costs is one of the easiest and most effective ways to help you meet your financial goals. Whether you’re feeding a family or only responsible for yourself, look for ways to cut food costs and use the money you save to help you pay down debt or pad your emergency savings account. The […]

Read More

5 Smart Ways to Use the Latest Stimulus Payment

On Thursday, March 12, President Biden signed into law the American Rescue Plan to help Americans manage the financial implications and many other aspects of the ongoing COVID-19 pandemic. A major part of this legislation calls for Americans to receive a third round of stimulus funds directly from the government. Individuals earning up to $75,000 […]

Read More

How to Save on Spring Gardening

March is National Nutrition Month, which means it’s a perfect time to talk about saving money on healthy eating. One way to do that is by planting your own garden. The National Gardening Association says gardeners who grow their own vegetables can save hundreds on their annual food costs. Plus, there’s nothing quite like the […]

Read More
Font Resize
Contrast

Call 866-528-0588

Or schedule a call now
Please complete the required fields to continue.
Now Later