Your first 12 months of homeownership set the tone for the entire journey. With just a few smart decisions, you can save money now and get more out of your investment later.
So make room on that New Year’s resolution list between “run a 5K” and “travel more.” Here are essential resolutions for new homeowners.
- Start an emergency fund. Homeownership has a funny way of costing more than you think. An emergency savings fund provides a financial safety net, and your new home is the perfect reason to start one.
Ideally, your emergency fund should cover several months of expenses, but it’s OK to start small. Set aside a portion of every paycheck with the goal of saving $500 as quickly as possible, and then contribute as much as you can moving forward.
- Take a close look at your homeowners insurance.
Just because a standard homeowners insurance policy satisfied your lender doesn’t mean you’re adequately covered.
Does your policy cover the full cost of your jewelry or other valuables? Are disasters like earthquakes and floods excluded? Will the policy pay if your dog bites the new letter carrier?
- Get an energy efficiency audit. Heating, cooling and powering a home isn’t cheap. Why be uncomfortable or spend more because your house wastes energy?
After the dust settles, you may notice more about your home, particularly if you bought new construction. Maybe the air smells funny or one bedroom is colder than the others. Get an energy efficiency audit. Audits are performed by utility companies, city governments and some contractors.
In addition to lowering your utility bills and making you more comfortable, a more efficient home may end up putting free money in your pocket, thanks to local, state and federal rebates.
- Create a disaster kit with a home inventory. Your new home is your castle, but it’s not indestructible. A disaster kit that includes financial documents and a home inventory will speed up recovery if the unthinkable happens.
A home inventory can be as simple as snapping pictures of big-ticket items in your home, or you could record items, brands, original prices, ages and condition in a spreadsheet.
Store the inventory, along with copies of your personal identification, credit card information, vehicle records and other important documents, in a fireproof safe or another place that’s easily accessible if you have to evacuate.
Unless you bought your home with cash, it will be many years until you own it outright. Make plans now to build equity faster so you can unlock more benefits of homeownership even sooner. You can build equity slowly just by making your monthly mortgage payments, or you can find ways to speed up the process. Take on smart home improvements or switch to biweekly payments to get “equity rich” even faster.