The Beracha, Hardin & Johnson Buy vs. Rent (BH&J) Index attempts to answer the age old question: In today’s housing market, is it better to rent or buy a home? They attempt this by examining
Now you own the home
So now that you own the home, there are some items that you should keep in mind. Managing the costs of your new home should be a smooth process if you plan ahead. Here are five steps that can keep you on the right track.
1. Set goals. We all know that budgeting is the number one way to stay on track with your finances. With your new home, that is more than ever true. After you have lived in it awhile, you will have developed an idea of what you want to improve in the home, such as a brand new kitchen or bathroom, new hardwood floors or revamping the landscape. Set a goal, budget for it, and before you know it, you'll have saved enough for your dream improvement.
2. Maintenance. Don't forget that now that you won the home, you are now having to spend your money on your homes upkeep. Plan on budgeting a minimum of 1% of the homes purchase price annually as a minimum for annual upkeep.
3. Insurance policies. So now that you own the home, check out your life insurance policy to be sure if something happened to you or your spouse, that the mortgage would be covered. Make sure your homeowners policy is adequate. You do not need to over insure or under insure. Do you want earth quake insurance? Go over that with your insurance agent to see if it makes sense, the deductibles can be pretty high.
4. Interior Design. I have found that it is always good to live in a home a while before making drastic changes to the design of the home. You need to get a feel for the flow and how it works or not. Give yourself a break, don't rush into it. Plan carefully, develop a plan and a budget that you can live with. Remember, most everything comes on sale sooner or later.
5. Emergency fund. We are told constantly to have reserve funds. I know sometimes that is impossible, but with owning a home it is necessary to be able to have 6 moths to a year of savings put away just in case something unexpected happens to your income or the roof starts leaking. Start slowly, a little every month adds up. Now that you own the home, you want to be prepared for the unexpected.
Home owership is usually at the top of everyones to do list. If you plan ahead, the experience is one of the most rewarding accomplishments.
Happy homeowning to you.
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