Jumping into homeownership is a significant step, and it’s an excellent choice for many reasons. It gives you peace of mind knowing that your future residence is yours, and it’s also a wise investment. Though there are many financial benefits to owning a home, such as tax deductions and appreciation, there also can be some unexpected surprises along the way. Even newer homes can have issues shortly after moving in. It’s always wise to save money for unexpected expenses, especially when you move into a new home.
The following are some tips you can put into practice to save for unexpected expenses.
Set Aside Savings Solely for Home Repairs and Maintenance
When you buy a house, it’s easy to focus on day-to-day living and ignore the big picture. But if you’re not careful, you could wind up with a big problem on your hands—like an unrepairable roof or foundation.
A good rule of thumb is to set aside 1 to 3% a year for repair and maintenance costs in a separate savings account. If you bought your home for $400,000, that would mean setting aside at least $4,000 yearly.
You can also use this money for improvements: new appliances, a fence, or even redoing the floors. The point is that it’s not just about making repairs; it’s also about planning for how long you want to live in the house and what you want it to look like when you’re done.
It’s easy to forget about all the little things that cost money over time—like replacing worn-out appliances or fixing leaky faucets—but taking care of them as soon as they happen will save you from having to shell out big bucks later on down the road.
Keep Up with Home Maintenance Throughout the Year
Maintaining your home throughout the year can significantly impact the number of expensive home repairs you’ll have. It’s essential to be on the lookout for small things that may need attention and address them early before they become a more expensive problem.
Make sure you have an annual check-up with a professional who can identify any potential problems in advance. This will help prevent major repairs later on.
It’s easy to feel overwhelmed by the prospect of fixing your own home. It’s a lot of work and can be expensive if you don’t do it right. But here’s the thing: a do-it-yourself attitude can save you money because it will allow you to fix minor problems instead of hiring someone else to do the work for you.
It’s easy to get into the habit of paying someone else to do everything for us, but it’s often possible to save money by doing things yourself when it comes to home repairs and maintenance. This is especially true if you have experience with the project you’re taking on.
We feel you if you’ve ever had a power bill that’s been more than you expected. It’s frustrating to pay more than you think is fair for something supposed to be a necessity! Owning energy-efficient appliances and LED light bulbs can significantly reduce your electricity bills.
You can ensure your appliances are running efficiently by checking their energy labels and keeping track of how much electricity they use when on standby mode (as opposed to actively being used). To put it simply: if an appliance uses less energy when turned off than when it’s on (even if it’s just by a few watts), then it should be replaced with one that uses less energy when turned off.
Next up, LED light bulbs are great for reducing electricity costs because they produce more lumens per watt than standard incandescent or halogen bulbs–that means they’re using less electricity overall! Also, consider installing motion sensors, so lights only come on when needed instead of always being on.
Purchase a Home Warranty Policy
If you’re a homeowner, you know that repairs are inevitable. Whether it’s a burst pipe that took out your kitchen or a clogged toilet that has left your bathroom unusable, there’s always something that needs fixing.
But if you have a hard time setting aside a significant amount per month for repairs, consider purchasing a home warranty when purchasing your home. Depending on your chosen plan, it can cover repairs for appliances and other large systems in your home.
Apply for a Home Equity Line of Credit
A HELOC can help you tap into your home’s equity to pay for unexpected expenses. A line of credit allows you to withdraw money from a particular account when needed. A home equity line of credit (HELOC) enables you to borrow money against the equity in your home. The amount of money available to you through a HELOC depends on your home’s appraised value and the amount of mortgage you have left to pay. Once approved for a HELOC, it basically works like a credit card.
You can access the equity in your home whenever you need it and can use as much or as little as you want (without exceeding your maximum approved amount). Then, you can pay off your balance over time. With this option, it’s essential to keep current on the monthly payments so the lender doesn’t foreclose on your home. The most significant benefit of financing expenses with a HELOC, as opposed to a credit card, is the interest rates. Interest rates on a HELOC are typically much lower than credit card interest rates – making them an excellent financial safety net in case of economic hardship. With this option, it’s essential to keep current on the monthly payments so the lender doesn’t foreclose on your home.
In the end, it all boils down to a simple formula: budget first, then spend. This way, you’re never caught off-guard by unexpected expenses or missed payments. The truth is that sometimes we can’t anticipate home repairs. But if and when they happen, they’re almost always better handled with some advance preparation. We hope you know where to turn to next time you need some help with unexpected home repairs.
Do you want to learn more about your options when faced with unexpected home expenses? Primco Mortgage is here and ready to answer all your questions!