As individuals and families reflect on the past year of change and uncertainty, it’s more important than ever to consider the ways in which you can prepare and protect yourself moving forward. Especially during times of major transition such as purchasing a home, moving, or starting a family, it’s critical that you take steps to secure your future while protecting all that you’ve worked so hard for. By taking time to consider some of the following pieces of advice, you can feel more confident stepping into this next phase of your life as a new homeowner.
Set a budget for your new lifestyle
As a new homeowner, there will be many expenses coming your way that previously would not have been in your budgeting routine. That is why, when you are looking to purchase a home or have recently taken the plunge, it’s important to revisit and adjust your budget accordingly. From your mortgage payment and maintenance fixes to bills and services, it’s important to stay on top of all these changes. The last thing you want to do is feel like you are living paycheck to paycheck after making such a large purchase. Either by taking time to sit with a financial planner or mapping out expenses yourself, you can have a clear understanding of how much money you will need to put towards your new obligations and how much you can allocate towards other things.
Secure proper insurance coverage
For individuals and families alike, this year has been a reminder of how the unexpected can happen to anyone and it’s always a good idea to have a plan for unanticipated circumstances. Homeowners insurance is typically an initial requirement to protect your property should there be an incident or irreplaceable damage occurs. When determining an appropriate level of coverage, it can be helpful to create an inventory of your possessions to guarantee that you aren’t underinsured. In addition to that, if you share your home with anyone such as a spouse or partner that might rely on your income to pay the mortgage, it’s highly recommended that you purchase a life insurance policy to cover this expense should something happen to you. By naming that individual as a beneficiary, you know they will be protected and not face a financial crisis should you unexpectedly pass away. There are various options available, which it’s why it’s important to spend some time reviewing life insurance plans prior to getting settled into your new home.
Differentiate between updating vs. necessary home repairs
When moving into a new home that might not be particularly up-to-date or match your interior design style, it can be tempting to want to make many changes all at once. Keep in mind that this is an investment and although you want to design your home to fit your style, it’s important that you are making the best decisions to support your current lifestyle and your future return on investment. Decide whether certain parts of your home need to be repaired or replaced for safety or quality standards compared to what you might want to change for aesthetics. If you are buying a fixer-upper home, you will have plenty of time to complete all your projects but remember you don’t need to do everything at once. Take it room by room and determine what is the first order of business and what project or redesign makes the most sense. Remember to do the math and begin with projects that you will get the most return from, especially if you don’t anticipate this being your forever home.
Make your home a safe environment
With so many decisions to make and plans to coordinate, it’s easy to overlook certain safety aspects of the home buying process, especially if this is your very first home. There are a few things you can do as well as some purchase considerations to help you gain more peace of mind knowing you’ve taken steps to meet home safety best practices. First, you’ll want to consider who will be living in your home with you. If you have small children or a baby, you’ll want to take specific precautions to baby-proof your home in order to avoid potential health or safety risks. Also, you should consider making a fire escape and other emergency plans with your family that can save you during an unexpected situation. Other considerations include installing proper locks, security systems, fire extinguishers, carbon monoxide detectors, and having a first aid kit prepared.
Look for ways to DIY and save money
If you are currently looking for some larger projects to get you through the winter months, consider DIY projects as they can really add up to save you some money.
Although some things on your list might require a professional, you’d be surprised to see how much you can save by learning to paint, add trim or molding, repair a wall, or refinish furniture instead of purchasing all new. While there might be a bit of a learning curve at first, you can utilize the same skills later down the road allowing you to avoid extra repair costs and having to coordinate professionals to come to your home each time something goes wrong.
Create an emergency fund
It’s very likely that you’ve heard this before at different points in your life, but nonetheless, it’s important to revisit from time to time. Creating an emergency fund is a
great practice for thoughtful money management. It can be easy to want to draw from your savings or transfer over money allowing you to purchase a higher ticket item, promising yourself you will put these funds back in your bank account after the fact. However, an emergency fund is best to be kept separate and to be used for emergencies only. It might be a good idea to discuss with your partner or make a list for yourself of what might qualify for use of this emergency fund. For example, if you want to replace your cabinets since they are outdated, this fund will not support that project. On the other hand, if your water heater broke, you might want to use this fund to quickly replace or repair this necessary piece of equipment. Your emergency fund might look different at each stage of your life, however, during
your early years as a homeowner, it’s especially important to maintain an adequate amount of funds in this account to help you avoid a financial crisis. As you become more familiar with your expenditures and spending allowances during the coming months and years, you can more easily set money aside and budget for various home improvements without fear of overspending.
As you realize, there are countless considerations and preparations during the initial stages of owning your first home. Although this can feel a bit overwhelming, it’s important to remain organized, focused, and simplify the process as much as possible so you can enjoy this exciting milestone! By keeping in mind these specific financial and personal pieces of advice, you can start this journey on the right foot and feel peace of
mind knowing your future is also being protected.