Tablet or smartphone? Scan or click here for 10 tips for maintaining your home. (See page 5 for scanning details.)
make purchases, watch for sales on art, paint,
appliances and lawn furnishings,” says
Solomon. Consider leaving a room or two
sparsely furnished until you’re able to buy
Stairway to haven
Six financial steps to
take after buying a home
5Set up automatic payments. For monthly household bills, ask to have the payments automatically withdrawn from your checking account or charged
to your credit card. In addition to saving time,
you won’t have to worry about missing a mortgage payment or electricity bill.
When signing up for automatic payments, ask about special offers. Some companies, such as those providing utility services,
offer a discount for paying automatically.
By Rachel Hartman
YOU’VE SIGNED THE paperwork, moved
in and had a toast to celebrate the purchase of
your new home. What’s next?
“Settling into a house can be daunting,
especially when it comes to finances,” says
Thomas Fox, community outreach director at
Cambridge Credit Counseling, a national
nonprofit credit and housing counseling
agency based in Massachusetts. Mortgage
payments, furnishings and upkeep can add
up quickly—and that’s before preparing for
unexpected repairs, like a new roof.
Fortunately, with a little planning, managing the costs of your new home can be a
smooth process. Here’s how.
2Factor in maintenance. To cover maintenance costs, “plan to spend approximately 1 percent of the home’s
purchase price each year,” says Gallegos. So if
your home cost $200,000, you’ll want to budget about $2,000 for annual upkeep. This
amount could be used to cover the cost of
replacing air filters, repairing a furnace or fixing the sprinkler system.
6Build an emergency fund. To prepare for the unexpected, “aim to have eight months to a year’s worth of
living expenses in savings,” advises Fox. This
would include what you spend on your mortgage payment, utilities, cable, phone bills and
other regular bills.
If putting together such a large amount
seems overwhelming, focus on building it
slowly. Start by setting aside a small amount
each month. You’ll be thankful for the extra
cushion of cash down the road, such as the day
you find out you need to replace the roof. C
Freelance writer Rachel Hartman and her
husband purchased a home in New Mexico
1Set goals. “Budgeting is the num- ber-one way to manage finances, pay bills and save after a move,” says Kevin
Gallegos, Costco member and vice president
of Phoenix operations for Freedom Financial
To develop a budget that fits your home,
he says, use goals as a starting point. Think
about what you want for the house, such as
backyard landscaping, a remodeled kitchen
or new windows. Then, incorporate those
goals into your budget. For instance, perhaps
you’ll decide to save for a year and then pay
cash to redesign the backyard.
3 Understand your policies. “Once you’ve moved in, review your homeowners insurance policy,” says
Scott Whytock, principal at August Wealth
Management, LLC, in Portland, Maine. Make
sure the coverage you have is adequate. For
instance, if a tree falls during a storm and
takes out the shed in the yard, will your policy
cover it? If you have questions, contact your
insurance agent to go over them.
Also check that you have enough life
insurance coverage for your current situation.
If your spouse passes away and leaves you
with a sizable mortgage, benefits from the
policy could be used to make monthly house
payments or pay off the mortgage entirely.
Save on energy in
your new home
The Costco Connection
Costco offers mortgage services and home
insurance (go to Costco.com and click on
“Services”) as well as many items to help
decorate and furnish your new home.
4 Decorate step by step. There’s no need to rush to the store for fur- nishings. “Live in the house for a while
to get a feel of the place,” suggests Pablo
Solomon, an artist and designer who lives
north of Austin, Texas. Then develop a plan
for home and yard décor, and prioritize the
items you want to get.
Before shopping, set up a decorating budget to guide how much you spend. “As you
FOLLOW THESE GUIDELINES to lower
your home’s energy costs.
Ask for help. Kevin Gallegos, of
Freedom Financial Network, suggests
having a home energy assessment to
learn what improvements can be made.
Seal it up. Weatherstripping
doors and windows can tighten up airflow in your home.
Program your thermostat.
Adjust temperature settings during the
hours you’re at work to save on heating
and cooling costs.
Wash with cold water. “Most
clothes can be handled on the cold setting of your washing machine,” says