Purchasing a new home is a pivotal moment in your life and it opens up new opportunities for you and your family. Before moving in, consider the importance of financial plans, and how to handle any debts associated with purchasing a new home. Here is some financial advice for new homeowners.
Create An Effective Budget
According to a survey from the Financial Post, four out of ten Canadian homeowners in 2017 did not have the budget to cover the costs of owning a new home. The company conducting the survey discovered that 4% of the participants were unable to meet financial demands on a monthly basis, and were turning to other more expensive debts to cover the costs. When purchasing your new home, ensure that your budget will allow flexibility for increases in interest rates, daily living expenses, utilities, and any unexpected costs that may arise.
Save on Energy Costs
Financial responsibility for heating and electricity bills is a significant factor in a new homeowner’s budget. Here are some helpful tips to reduce the costs of your utility bills:
- Install a drying rack in your laundry room: Your dryer can have a significant impact on how much you spend on electricity every year. Reduce your energy costs by installing a drying rack in your laundry room, or an outdoor clothesline in the warmer months.
- Install energy efficient light bulbs: LED and CFL light bulbs can save you hundreds of dollars in energy costs, and are well worth the initial investment. Installing them in a location where the lights are more frequently used will help to reduce the cost of your next utilities bill.
- Clear all vents of obstructions: Ensuring that your vents are not covered by anything will increase the efficiency of your heating and cooling system in your home. If there is any obstruction, the system will run more often, costing you more.
Furnish Your Home Wisely
A new home is like a blank canvas, providing exciting opportunities for customized spaces. Many new homeowners rapidly discover that furniture and decor are an expense that must be added to the budget. Instead of immediately purchasing all the furnishings for your home, realtor.com, suggests focusing on one room at a time. This method allows you to customize each room, resulting in a home that reflects your personality. Taking stock of what you already have will also help you budget when furnishing your home, as it will prevent you from purchasing any non-essential items.
Keep an Emergency Fund
An advantageous step for new homeowners to take is to set up an emergency fund. Unexpected costs can add up when you first move in, so an emergency fund is important in the event that you do not have enough. Resources like My Money Coach or Money Crashers offer suggestions on building your emergency fund, and keeping it accessible.
Seek Professional Help
Financial calculations are more frequent for new homeowners. According to Blue Water Mortgage Corporation, hiring a financial advisor is beneficial to you because they can assist you in managing and prioritizing your financial needs. Taking the advice of a financial planner can help reduce the risk of going over your budget, and help you balance your monthly payments. A tax advisor is also a great resource for new homeowners. Revenue Canada has introduced many new tax credits, some of which are beneficial enough that they can significantly decrease the costs of a mortgage. Hiring a tax advisor will ensure you maximize the potential amount on your return.
Overall, as long as you plan your budget and focus on staying within your financial range, purchasing a new home is exciting, and can be fun! For more information on financial advice,, visit the blog for Falconcrest Homes.
Tags: Falconcrest Homes, First Time Home Owners, Home Builder in Toronto, How to Save on Energy Costs, New Home, Some Things To Know Before Buying A Home, Tips on Purchasing a New Home