New Home? New Budget
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When most people think about buying a new house, the budget line item they immediately consider is the mortgage payment. And it makes sense. That payment is usually the largest monthly expense in most people’s budget.

But, as anyone who owns a home knows (or finds out very quickly after they make that purchase), your mortgage shouldn’t be the only home-related expenses in your budget. And if you’ve just recently purchased a new home, there are a few other expenses you likely need to consider as well.

Ideally, you’ve thought about these various expenses well in advance of committing to a mortgage, because it’s no fun being house poor even if you’re surrounded by marble countertops and his and hers walk-in closets. If you haven’t had a chance to think these thru yet, here is our list of the top home-related expenses we think you should be prepared for.

Home Repair Fund

All homes, regardless of their age, will need routine maintenance and repairs. Now if you live in a home built last year, your repair fund may look a lot different than that of someone who lives in a house built 100 years ago. New homes generally require less annual maintenance and upkeep. Regardless, you should plan on spending some money on making a few fixes and upgrades throughout the year. These are things like:

  • New lightbulbs
  • Air filters for your furnace
  • Water purifiers for your fridge
  • Maintenance on appliances
  • Painting
  • Electrical repairs
  • Plumbing repairs
  • HVAC maintenance or repairs
  • Water heater
  • Garage door repairs
  • Changing out locks, doors, screens
  • Rain gutter repairs

To name a few…

Home Renovation Fund

Your home repair and home renovation funds are not to be confused. These are two separate expenses. While the home repair fund should cover smaller annual expenses, a renovation fund is for much larger, long-term projects. So let’s say you bought your new house and the inspector says you’ll likely need a new roof sometime in the next 5-10 years. That’s something you’ll set as a goal in your home renovation fund.

Likewise, if you bought an older house and know you’ll want to make some major upgrades to it, say like upgrading the kitchen or adding a bathroom, these funds would be earmarked for a home renovation – not repair – fund.

Design and Decor Budget

Another thing to consider when buying a new house is how you’re going to decorate it. Few people move into a house and love everything as is. At the very least, most people use a move to replace things like bathmats and shower curtains. So planning for purchases like new bathmats, changing paint colors, swapping out door handles, or installing window treatments should go in a decor fund.

If the home you’re moving into has more square footage, this fund may need to be a bit larger. Perhaps you’re planning on buying a new bedroom set for the extra room you now have. Or you’ve got a much bigger living room and can finally fit in that massive sectional you’ve been dreaming about ever since you saw it in the Crate & Barrel catalog. Plan for these (fun) purchases too.

Utility Costs

Oftentimes people take a wait-and-see approach with their utilities when they move into a new home. They don’t have a sense of how much a monthly electricity or gas bill will cost. But you can get this information from your local utility company. Call and ask to see how much the monthly bills were for your address over the past 12 months. This will give you a good idea if you need to start planning now for a massive air conditioning bill come July. Or if you’re going to be hit with a $500 water bill twice a year, you’ll want to know in advance and plan for that too.

If nothing else, seeing the history of these utilities should tell you something about the condition of the homes insulation, plumbing, and HVAC system, which may be a deal breaker if you discover there are likely some costly repairs in your near future.

Landscaping Budget

Depending on where you live, this expense can vary greatly. While someone in Michigan might be budgeting for a snow removal service, here in Phoenix we’re more concerned with finding someone to trim our palm trees. Likewise, if you’re a gardener, every spring you might want to budget a couple of hundred dollars for new flowers and greenery for your yard.

Your tolerance for yard work will also need to be factored in here. If you’ve got a 13-year-old who’s always looking to earn an extra buck, then maybe you’re not paying a service to come and shovel snow off your sidewalks. Likewise, if you work a full-time job and don’t want to spend your weekends doing yard work, then hiring a service (though the cost might be higher), could be a worthwhile expense.

Pool Maintenance

In Phoenix, pool season lasts 6 months, so making sure your pool is up and running is a top priority. Don’t forget to budget for cleaning and routine maintenance. Likewise, if you purchased a home near a club or local pool that has an annual fee, you might want to consider putting that membership as a line item in your budget.

Alarm and Security Fund

Systems can vary in cost, but if your home doesn’t come with a security system, you might want to plan for one. There are plenty of options nowadays. You can get a top-of-the-line whole house system from a company like ADT or go with a more cost-effective and higher tech option like a Ring system. Either way, if you haven’t had to worry about security before, don’t forget to add this as a new line item in your budget.

HOA Fees

If you’ve purchased a new home, that community may come with homeowner association fees or HOAs. You’ll know about these expenses ahead of time (before you sign on the dotted line to purchase your new property), but make sure this expense is in your budget. Also, there may be other fees tied to association living that you’ll want to be aware of. See if you can talk to other homeowners to get a sense of any unexpected expenses associated with living in an association.

One last thing to budget for – a good bottle of champagne. Don’t forget to celebrate this momentous occasion with a toast to your new home. Congrats!

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