Congratulations on Your New Home: 10 Expenses to Budget For
So you finally bought a house, or maybe you’re still in the daydreaming stage. Either way, there are a few things you should know about the costs of homeownership. Spoiler alert: it’s more than just rent and a high five.
1. Mortgage Payments
Your mortgage is your monthly ticket to stay in the house you bought. It’s a long-term partnership with your lender, and includes principal (the loan amount) and interest (the cost of borrowing). Unlike rent, this payment builds equity over time, making the house more yours each month. Just make sure to choose a mortgage amount that allows for a comfortable lifestyle.
2. Property Taxes
Property taxes fund local services like schools, road repairs, and libraries. The amount you pay depends on your location and the value of your house. Some pay annually or semi-annually, while others include it in their monthly mortgage payment. Either way, it’s a necessary expense.
3. Utilities
Light, water, heat, and Wi-Fi are all essential utilities to consider. Even if you’re moving from an apartment to a house, be prepared for higher costs. And as your house grows, so will your utility bills. Don’t forget about trash and recycling, heating and cooling, and gas or oil. And if you have a yard, you may need to budget for sprinklers or irrigation.
4. Maintenance and Repairs
Houses can be full of surprises, aging like a banana that ripens overnight. Common repairs include leaky faucets, malfunctioning garage doors, and faulty air conditioning. Experts recommend saving about 1% of your home’s value per year for maintenance. It may not be glamorous, but it’s better than dealing with a burst pipe at midnight.
Now that you have the keys to your new home, it’s time to budget for these necessary expenses. Don’t let them catch you off guard and ruin your dramatic robe-wearing hallway wanderings. Welcome to adulthood.
