We all know the economy is tough right now. Most people are looking for ways to cut cost and control their monthly expenses and spending. Often they do not realize how much they are paying to live in their homes. So let’s take a look at the home budget and see where you might be able to make some changes.
Mortgage: Your largest expense is probably your mortgage. Mortgage rates are historically low. You might be able to refinance and lower your monthly payment.*
Homeowner’s Insurance: Check in with your agent once a year to see if you are getting the right coverage at the best price.
Real Estate Taxes: The higher the assessed value of your property, the higher your real estate taxes. So the next time your city or town does a reassessment, don’t be afraid to ask for abatement if you think they have given your home too high a value. Do your homework. Look up the assessments for similar homes in your neighborhood. The records are public and usually available at the tax assessor’s office.
Recurring monthly expenses:
- If you pay for town/city water, town/city sewer or a homeowners’ association, those are probably fixed expenses you can not cut.
- If you pay for private trash collection, lawn and gardening services, exterminator services or pool maintenance periodically look around for cheaper rates. Even if you are happy with your current supplier, this information could help you get a better deal.
- Phone, internet and cable TV services should be reviewed at least once a year to see if competitors offer better prices.
- Energy costs. Oil companies should be reviewed once a year, before heating season begins. And if you think oil may be going up, pick a supplier who will lock in the price. In a growing number of areas, you can also find competing electric companies. Find out who has the best deal. If you heat and air condition with gas, ask your local gas company about special offers.
Maintenance and Repairs: It is always cheaper to fix a problem as soon as it comes up, rather than letting it go. It costs very little to re-caulk around a bathtub, but if you ignore it, you could wind up replacing a wall. Put aside $500 to $1,000 a year to take care of minor repairs and maintenance.
Major Improvements: If you have your heart set on updating a kitchen or bath, installing a deck, or even putting on a new addition, get a rough cost estimate and decide how many months from now you would like to start. Divide the cost by the months and begin putting money away for it each month.
Your home is your biggest investment. But with a little effort you can make your home costs smaller.
Tips provided from Home and Wealth Newsletter, Mike and Betsy Moshofsky, Prime Lending.
*Thinking of refinancing? Contact Mike today at (480) 332-8545.
