As a new
homeowner, you may think the days of big spending -- primarily
for your down payment and closing costs -- are over. But what
many homeowners find is that the house itself is just the
beginning. There are home improvements, maintenance projects,
furnishings, decorating, property taxes, insurance -- the
list goes on. But with proper budgeting and patience, most
homeowners can make their mortgage payments and take care
of all the extras.
"In the first twelve months after purchasing
a newly built home, owners spend an average of $8,900 to furnish,
decorate and improve their homes -- more than twice the $4,000
spent by non-movers," the National Association of Homebuilders
says in its report, "Housing: The Key to Economic Recovery."
Where does that money go? The report says about
77 percent of it goes toward furnishings and changes to the
property. The rest is spent on appliances.
Those who buy existing homes spend $3,766 more
than non-moving homeowners in the year after they buy a home.
As a new homeowner, it's sometimes easy to
get lost on spending sprees and ultimately increase your debt
and potentially reach the point at which you get behind in
your mortgage payments.
"Most homebuyers can find unlimited furniture,
appliances, and remodeling projects that quickly exhaust the
incomes of even the rich and famous," says Eric Tyson
and Ray Brown in their book, Homebuying for Dummies (Hungry
Minds Inc., 2001). "Because of these spending temptations,
more than a few homebuyers end up not saving any of their
hard-earned incomes."
The authors say it's important to remember
your financial goals like retirement and to pace the household
purchases and projects.
The National Foundation for Credit Counseling,
a nonprofit credit counseling service, also has a few suggestions
to stay on financial track, including:
Keep your budget updated. After you buy your house and move
in, budget for new bills, including homeowners insurance,
property taxes, utilities, and repairs that will come up over
time.
Look for utility savings. Contact your local
utility company to schedule an energy efficient home audit
to get advice on how to improve your energy efficiency. You
may also want to ask about a fixed utility payment -- equal
payments spread out over a year as opposed to month-to-month
payments that reflect how much energy you used the month before.
Save and plan for your furnishings. After you
buy your new house, you'll likely be anxious to start planning
for new furniture, window treatments and appliances. As a
new homeowner, you'll likely be bombarded with credit card
offers. Resist the temptation to over-extend yourself. Instead,
plan on spending a specific amount each month for these furnishings.
If you must use credit, use just one or two credit card balances
and try to pay off the balance in full to avoid interest charges.
Article continued at http://realtytimes.com/rtcpages/20030923_adjusting.htm
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