You may have done everything right in saving to purchase a new home. You were careful about opening new lines of credit, you avoided any credit inquiries, and you protected your credit score as if your life depended on it. Once you purchase a home, however, there are many, many things to tug at the wallet. Here are some tips to ensure you continue the good habits and budget your money to cover the essentials.
· Delay large purchases. There may be temptation to spend every cent of the money you have saved for furnishing your home right away; however, it is a better idea to delay those purchases until you have adjusted to what your bills will be in your new home. If you can avoid large purchases for a couple of months, it is wise. Continue protecting your credit by keeping those balances low and resist the temptation to furnish via credit.
· Space out large purchases. If you are unable to delay your large purchases, at least try to space them out. Prioritize your large purchases including appliances, furniture, electronics, and any improvements to your home. Tackle them one at a time, spending only what you have available (and by available, we mean have saved up rather than available on a credit card). Remember that fully thirty percent of your credit score comes from the balances you carry on those cards and as such, running up large purchases can seriously damage a score.
· Keep some of those savings in reserve. The key here is again to avoid temptation to go on major sprees. Especially if you have just purchased your first home, there may be quite a few unexpected expenses that crop up. It is best to maintain a savings of 3-6 months of expenses to be able to cover unanticipated costs and possibility of loss of income.
Adjusting to new expenses can be difficult, but you can make life much easier on yourself if you only plan ahead and thoughtfully spend. As you continue your good credit habits, your credit will keep improving and make your financial life much smoother in your new home.