As a first-time homeowner, you feel thrilled that you finally have a place you can call your own. But you also feel nervous about the additional costs that come from owning a home.
When you rented, you had a fixed cost you paid each month. Now, you have to worry about paying for the following:
- Transaction cost
- Property insurance
- Property taxes
- Maintenance costs
Paying for a home can cost much more than renting. If your salary hasn’t gone up, you may need to make some financial adjustments.
Here are some tips to help you save money and pay off your house as soon as possible.
Budget and Track
Perhaps you haven’t been very serious about budgeting before you owned a home. Now, you must keep track of all of your spending. Create a budget that allots for how much you expect to spend in the following categories each month:
- Home (mortgage, taxes, transaction fee)
- Gas/car maintenance
- Fast food/restaurants
Each month, track how much you spend in each category. Discuss with your family whether you need to adjust your spending in a particular category.
Make sure to set aside a portion of your money each month in a savings account. Having a savings account matters because you never know when extra costs may arise. If you don’t have any money saved, something as extreme as a job loss or as small as needing to buy extra school supplies for your children could set you back.
Avoid Consumer Debt
You often have to go into debt to buy a home or to pay for an education. However, you should avoid unnecessary debt as much as possible. Charging your credit card for clothing or taking out a loan to pay for a computer is typically not a good idea. By the time you pay off the debt, you’ll end up paying much more than you would have upfront due to interest. You may even end up paying for the item several times over!
Be very careful about how you use your money. If you want something you can’t yet afford, set aside money each month until you have saved up enough for it.
Enjoy Free Activities
Many families think of expensive vacations, theme parks and season hockey tickets as necessities. While vacations and activities bring fun, you need to examine your budget before you spend your money on them. If you can’t afford them, there are plenty of free ways you can have fun as a family.
Choose a “staycation,” where you spend vacation time exploring your own city. During the staycation or throughout the year, you can:
- Visit free parks and museums
- Attend local festivals
- Have a family picnic
- Play board and card games
- Play sports
- Put together a puzzle
- Bake a dessert
- Throw a party or barbeque
Eat at Home
One of the biggest costs you can eliminate is you spend on eating out. Try cutting back on eating out and see how much money you can spend. Instead, try some home-cooked recipes.
Buy in Bulk
According to a 2012 study, bulk foods cost 89% less than packaged foods. The best foods to buy in bulk are foods you know you’ll always need and foods that don’t go bad with time. These include:
- Baking supplies, like flour
- Coffee and tea
- Peanut butter
Just store your food in large containers. You may pay more initially, but you will save a lot of money in the long run!
When you manage your money, you reduce the stress and consequences that come from debt. You can take care of your day-to-day expenses without getting overwhelmed by your house payments.
Enjoy your new home, and reduce the worry of paying for it with these money saving tips! Learn more about becoming a first-time homebuyer in St. John’s, Newfoundland. Call The Mortgage Centre to book an appointment with a mortgage broker today!