First and foremost, congratulations on becoming a new homeowner! You've just achieved what many plan for and dream of for many years. To help continue on your successful path, here are a few helpful hints to maintain your financial health.
1. Plan Your Purchases
Furniture, artwork, technology, kitchenware, linens...it's time to furnish your new home! It's easy to get excited about turning the property into your space, but it's also important not to run up your credit card bill especially given your new monthly expenses. So how can you get all that you want without emptying your wallet? Make a list! Keep it simple: needs & wants. Which items do you absolutely need before you can live in your place? An important tip here is to determine which items are most important to you and which can be purchased a little later on. Keeping a list can also help save you money. When a sale comes up, you'll have your checklist that you can save on. Also, don't forget about second-hand furnishings!
2. Track Monthly Expenses For Awhile
Homeownership is very rewarding, but also comes with additional responsibilities. Taking a closer look at your monthly spending for the first while in your new place can certainly help sort out how much money is leftover for discretionary spending, such as household goods, vacations, or a fancy dinner out. As with any major change, it may take some time to get used to seeing bills including hydro, Internet and cable, strata fees, and a mortgage payment. Once you are familiar with handling these items, you'll have a good grasp on knowing what you can splurge on.
3. Don't Forget The Annual Expenses
Alongside monthly bills, be sure to allocate funds to cover the annual larger ticket items. Depending on the city you live in, you may have an annual water bill. As well, every homeowner must pay property taxes and obtain home insurance. The last thing you want is to be unprepared for these expenses when they arrive.
4. Maintenance, Repair, and Renovation Budgeting
With no landlord to cover the costs if anything goes wrong, part of owning a home is shouldering the responsibility of maintenance and repair costs. Hopefully with the help of a home inspector, you've double-checked that the appliances, faucets, structure, and other mechanical details are in good working condition. Over time, parts do wear out, screws become loose, and homes need modernizing. Having a repair budget set aside can help to prevent stress if for example the fridge all of a sudden stops running. In addition, it's never a bad idea to build up a renovation budget for when the time comes that you wish to freshen up your home.
5. A Personal Contingency Fund
Over and above, a personal contingency or 'emergency' fund is a great way to maintain peace of mind. This safety net budget can come in handy should you get caught off guard with an unexpected bill or special levy (i.e. condominium levies). Consider this fund more of a protection against emergency situations and avoid using it unless absolutely necessary.
Following these tips can go a long way to maximize the joys of home ownership. Taking steps to ensure you are safeguarded is similar to exercising to maintain your health. The responsibility is certainly worth the reward!
To learn more about the ways you can be sure that your journey in home ownership goes smoothly, or if you're looking to begin the process of owning a home, feel free to email me anytime at adil@adilkhimani.com.
All the best,
Adil