Housing Costs Than Can Cause Havoc with Family Budget

When purchasing a new home or living in your current home there will be unexpected expenses that occur that may put stress on the family budget.  Planning, researching, and having financial reserves for unexpected occurrences are key elements that need to be practiced in order to prevent financial disaster.  Areas where you need to practice conservatism to some degree: 

Home improvements – It is human nature, want to make improvements to your new home, or a home that is in excellent condition.  The reason for this, the desire to make the home uniquely yours, or give it a new look.  Need to remember, that countertops, new carpet, and remodeling bathrooms, etc. may be expensive.  Many times, these types of projects have cost over runs due to plan changes.  

Moving costs – After buying your new home, you will be faced with moving your personal property to the new home.  This can be very expensive, especially if you hire a professional mover to pack, and move all your items.  This may be the time research other moving alternatives, unless your employer is paying moving cost.  Check your budget, and determine what you can reasonability afford to pay.  Then work within that budget to determine what moving options available. 

Home furniture – With a new or current home, you may desire to update furniture.  Before adding or updating, verify that your finances are sufficient to support most emergencies that might occur, and recommend paying cash to avoid the extra interest.  In many situations, furniture is a luxury not a necessity.

Time – Time is always money either directly or indirectly. Plan your packing and move if at all possible during non-working hours, or take vacation time to have the least impact on your finances.  If you are an hourly worker, taking time off from work, increases your financial burden.  

Property taxes and insurance – Before making an offer on a house, review a copy of the property tax report from the county.  Most states have an option for a short period of time, to back out of the purchase with a minimum penalty to buyer.  During this period of time get an insurance, and property tax quote. Be sure these amounts are included into your monthly mortgage payments.  Getting an insurance quote may eliminate the possibility of a later surprise.            

Maintenance – Each year as a homeowner, will need to spend approximately 2% of your annual income towards maintaining your property.  This could include roof replacement, yard maintenance, and replacing carpet, etc.   Many times, needed repairs occur as an unexpected financial burden to owner. 

Utilities – Prior to signing a contract to purchase a home, or during an option period which allows buyer to back out of the transaction with minor penalty, be sure to request, and receive from the seller utility history for the past year.  This utility history should include, gas, electricity, and water.