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Especially for first-time buyers, there’s often some adjustment when it comes to finances. Perhaps you’re used to a landlord covering repairs, or maybe you’re used to not being able to customize the space. Whatever the case, owning a home is different than renting in many ways, and getting into the homeowner mindset is important. Here are a few financial tips new homeowners should keep in mind:
Stick With Regular Maintenance
Depending on your living situation prior to buying your home, you might not be used to managing routine maintenance for your living space. It’s essential for homeowners to stay on top of this. Yes, it’s often an investment of your time and/or money, but when you overlook these routine tasks, it can mean damage to your home and much larger expenses down the line. Whether you handle all the maintenance yourself or hire professionals for things like cleaning the gutters, what matters is that these tasks don’t fall off your radar.
Create an Emergency Fund
Many homeowners find that their rent payments were actually more expensive than their mortgage payments. But don’t count the difference as spending money just yet. In addition to paying the mortgage, homeowners also should get in the habit of putting money into an emergency fund. This way, if you have a major unexpected repair, like a roof, for example, you’ll have some cushion to help you manage the expense.
See Your Home as an Investment
As a homeowner, you have a new relationship with your space. Rather than handing over a monthly payment to a landlord and knowing that you’ll likely leave that space at some point, your home is an investment. Your monthly payments are helping you to build equity, and the updates and repairs that you make can directly contribute to the value of your home. This means that even if you do end up moving and selling your home down the line, you’re likely to get some return on investment.
Review (& Revise) Your Budget
A great step for first-time buyers is to reassess their budget. You’ll have new expenses now, like homeowners insurance and property taxes for example, and you may want to spend more money than in the past on renovating and updating your home. Whatever the case, it’s important to review your budget and the financial changes that a homeowner brings and recalculate. This helps new buyers shift into the mindset of a homeowner and better understand where their money is going.
Do you have any additional tips for first-time buyers to manage their finances as a homeowner? Are you a new homeowner yourself? What challenges have you encountered? I’d love to hear your thoughts.