Budget tips for new homeowners
You have just received the keys to your first home. Owning and maintaining your new humble abode can be expensive. It is wise to implement a budget and savings strategy that can assist in improving your finances and not allow you to fall into debt. How can you save money? Nerina Heyns, Principal at the Onrus/Sandbaai office of Hermanus Property Sales shares her budget tips for new homeowners:
Set up budgets
Recording and keeping track of your monthly income and expenses can give you insight on what you are spending too much on and how much extra you will have to spend for the month. "Day to day living is expensive, especially when you are moving from the folks for the first time. Budget and stick to it. Don't make more debt, your home loan is more than enough to worry about." highlights Heyns. Also consider that your utility bills will be higher than before as this is now your own home as opposed to renting or living with family. By budgeting for this cost ahead of time you can prevent any surprises when the bill arrives.
Saving goals
Heyns shares a smart way to save: "Use your bond as an access bond, put all savings you have, 13th bonus cheque or whatever you can save, into your access bond. This is the most interest you will earn on savings and it is easily accessible. It also brings down the original capital amount you have loaned from the bank, if you keep on paying the initial repayment amount."
Unexpected expenses
While having a solid budget and saving goals are vital, you should also take into consideration any unexpected expenses. These expenses can vary from home maintenance to personal dues that will ultimately affect your spending power. "Definitely have a 'rainy day fund' which you don't touch for that unforeseen breakage or emergency. Make sure that you can service your bond and have a little extra for the chance that the interest rate may be increased in the future." advises Heyns
Pay your bond on time
Paying your bond on time is important when owning a home. In severe cases, if you are always late on your payments, the bank may repossess your property. Not only will you lose your home, you can also damage your credit score. Along with your bond, you should also consider home insurance. Heyns says "If something big and tragic happens you will be covered. Again, pay your insurance on time as you don't know when you will need it."
Get creative with your home decor
When moving into a new home, you are inundated with ideas about decorating. Do not go overboard though as this can be one of the largest expenses a new homeowner takes on. "New furniture is wonderful, but accepting second hand pieces from your folks or friends can be very easily painted to fit into your décor and serve a purpose until you are in a position to buy that piece that you actually want."
Keep up-to-date with specials
You can save money on day-to-day home essentials by keeping up-to-date for store promos and bulk deals. You will always need essentials such as toilet rolls, dishwashing liquid, shampoo, and toothpaste. Even if you have to purchase extra, it would save you money in the months to come.
Heyns also points out: "Remember to budget for some fun as well, you don't want to be burden down by the home loan and forget to live!"
Buying your first home is an exciting time in your life, however it can be a challenging process, contact Hermanus Property Sales for expert property advice.