I Bought a Home – Now What?
After hours of researching the perfect neighborhood, touring who knows how many houses, and signing what feels like one hundred papers, it’s finally yours. Your very own home. The reality of this new chapter in your life can be both exciting and overwhelming. And whether it is your first home or you’ve been around the block a few times, it’s worth creating a plan to ensure your home buying decision aligns with your big-picture financial plan. The following bullet points are items for you to consider as you move along the journey of buying a home. We hope you find them informative.
- Think About Your Long-Term Goals
- Why did you buy the home? To raise your family? To downsize? Something else? Whatever the reason, it is important to consider how this decision matches your long-term planning goals. We believe that one of our most important roles as financial planners is to be a sounding board for our Clients as they articulate their individual goals, and to create policies to help them use their resources in ways that support these goals. We encourage you to leverage us as a resource on your home buying journey at whatever time you feel most comfortable – as we like to say, we’re great people to think with!
- Make Sure You Understand the Full Cost of Ownership
- The expenses that come with owning a home add up quickly – examples include property taxes, utilities, HOA fees, lawn cutting and housekeeping services, and more. Be sure to update your budget to account for these items so you can be fully aware of your anticipated monthly expenses.
- Consider Funding a “Home Maintenance” Account
- In addition to your emergency fund, you may consider setting up a separate “home maintenance” account for expenses like insurance, property tax, HOA dues, renovations, and repairs. Economist Dean Baker of the Center for Economic and Policy Research suggests setting aside 1% of the purchase price for repairs and maintenance. That means if you buy a $375,000 home, plan to stow away $3,7501. You may not need that money for some time, but it is a good measure to take for when you do.
- Research Additional Insurance Coverage
- The most important insurance policies for new home buyers include homeowner’s insurance to protect your home, property and casualty insurance to protect your belongings, and umbrella insurance for broader coverage. As you think about your insurance needs, you may find it helpful to create a spreadsheet of your valuables and take pictures to match each item. While this may feel like a tedious task, having an inventory of your belongings can assist in the claim process in the event of an accident. Use your pending move as a trigger to complete this exercise by updating the file as you pack and/or unpack your belongings and purchase items for your new home. Don’t forget to keep several copies of this document in a safe place, perhaps even in the cloud, to ensure you have access to it no matter where you are.
- Take Care of Your Investment
- Your intentions for purchasing a new home may be to embody Chip and Joanna from HGTV’s Fixer Upper; renovate, sell, and (hopefully) make a profit. Or, your intentions may reside in finding and growing your forever home. Wherever you lie on this spectrum, purchasing a home is still an investment – and a significant one at that. As such, it is important to keep the home in good condition; not only because you invested your time and hard-earned money into it, but also because poor home maintenance can result in large expenses down the road and/or affect the listing price and leave you with less cash in your pocket if/when you decide to sell it.
- Get (and Stay!) Organized
- Making sure your financial documents are organized and readily accessible can help reduce stress, simplify any financial requests, and ensure you are adequately prepared when you need to access any important documents. When it comes to the setup of your financial organization, we suggest being mindful of the following categories.
- Other Housekeeping Considerations
- Make any necessary home improvements before moving in – it can be a real pain moving all of your furniture when laying down new flooring or painting walls.
- Do a deep clean of the home before you move in. If you plan on hiring someone to do it, check for services on websites like Angie’s List or Groupon to see if you can snag yourself a deal.
- Update your address all of your assets and liabilities, set up utilities, and change the locks on the home.
- Map your circuit breakers to their outlets to save time and hassle when power goes out.
- Figure out where your shut-off valves are in case of a homeowner emergency like water pipes bursting.
- Assemble an emergency supply kit.
- List emergency contacts, and post them where it’s easy to see.
- If moving to a different state, remember to register your vehicle(s) in the new state.
- Make sure motion lights and other security lights have working bulbs.
- Ask your neighbors about who to go to for bigger-ticket items like landscaping and exterior painting – they may not have a recommendation, but they may have someone to warn you about.
- Throw a housewarming party – it not only gives you a set deadline to get the place in order, it will also allow you to share your excitement and hard work with the people you care about!
Remember, your team at Yeske Buie is always available to help you navigate major life transitions including the home buying process. Please do not hesitate to reach out to us – we are happy to help.