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Budget Tips for a New Home Owner

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  • 22 September 2017

Budget Tips for a New Home Owner

As a new home owner there is a lot of exciting things to look forward to but there is also a lot to learn. While you may want to do everything at once, you should consider a few simple budgeting tips first to make sure you don’t become overwhelmed by bills.

To give you some help, we have summarised our key budgeting tips below, so keep reading to learn more.

6 Budgeting Tips for New Home Owners

Owning a home can be expensive, but it doesn’t have to be stressful. 

With a few savy budgeting tips, you can put in place a budget strategy immediately to make sure you can continue to save after buying a home.

This will allow you to be prepared for unforeseen circumstances that could make it hard for you to make payments. It will also help you plan for costs rather than be surprised by them.

Here are 6 tips that you can follow as a new home owner that will help you budget to save and cover all your new expenses.

1) Make your payments on time

Paying your bills, especially your mortgage on time is extremely important when owning a home. Many service providers, including banks, will charge you late payment fees that can start to add up.

The best way to avoid missing payments is by setting up a direct debit system so that your bills are automatically paid on time. This way when you get busy, you can’t forget to make payments.

If you know there will be a period of time that you will have a little more cashflow, increasing your mortgage repayments by an extra $50 to $100 per payment could significantly reduce the amount of interest that you will pay over the life of your loan.  This can also save you when interest rates increase.

2) Plan for a higher than normal electricity bill every month

Many people are taken back when they get their first electricity bill. 

Preparing for higher electricity and gas bills by putting away small amounts each week will make sure you aren’t spread too thin when you get your first bill.

It is important to factor in changes in the seasons when budgeting for how much to put aside each week.  For example, electricity costs can increase in either winter or summer depending on where you live.  In Queensland, air conditioning contributes to spikes in electricity over summer, whereas in Victoria, you will pay more to heat your house over winter.

If you budget a higher than normal amount each month you will be prepared if your electricity costs increase.

3) Put aside money for home repairs

When you are renting you don’t have to worry about enduring the large costs when things in your home or apartment break. This is generally a cost that new home owners aren’t prepared for when they need to get a plumber, electrician or other tradesmen to fix something.

By routinely conducting home maintenance tasks you can minimise the chance of encountering unexpected problems while also extending the life of your appliances.

If you put aside a small amount each week you can ensure you are prepared when things don’t go to plan.

And remember, if you find a small problem, don't ignore it.  Fix it now so that it doesn’t become a larger, more expensive problem later.

4) Decorate one room at a time

When you move into your new home you may find the inspiration to decorate your home all at once.  A new couch, a rug for the family room  updating the bedroom furniture.  The list can become endless and the costs can quickly add up.

Our suggestion is to work out a budget per room and then focus on one room per month depending on your total budget.

And if you need furniture or home decor, consider buying second hand or accepting your friends and family unused items. 

5) Have an emergency fund in place

You bought a home and budget is tight.

Don't let that prevent you from creating an emergency fund right now.  Set up a separate bank account and deposit small amounts across each pay period.

You'll be able to rest knowing you have a cushion in your budget in the event something unexpected happens.

Never be caught off guard, having this fund can help get you through difficult times.

6) Heating and Cooling your house the cost-effective way

There are many little tips to help heat or cool your house without having to use large amounts of electricity. It may be easier to just switch on the aircon or heater, but these appliances can quickly push the cost of your electricity bill up.

Instead consider installing block out curtains or tinting your windows to decrease the heat buildup in your home.  Ceiling fans are a great alternative to air-conditioning to cool your home while using minimal electricity

To keep your home warm, ensure that doors and windows are kept closed during the day, especially at dusk so that the warm air doesn’t escape.  Consider using a ‘draught door stopper’ on your external doors.

They are only simple changes but it can have a big impact on your electricity bills and help you free up your money to spend on more exciting things.

Bottom Line

Don't make the mistake of allowing time to go by without preparing for the costs associated with being a new home owner.

The most important thing you can do is keep your finances and expenses under control.

That means you need you to start now by setting a budget.

Once you have a budget set, manage it, and stick to it no matter what.

Click here to learn about Villa World’s range of homes and land across Queensland, New South Wales and Victoria.