Owning a home is still very much an intricate part of the “American Dream”. Most individuals hope to one day find the perfect place to call home. However, with that dream comes a huge financial responsibility. Though financial experts suggest not letting housing costs exceed 30% of your total household income, many families have found that it takes up a much larger percentage. Unless you want to end up in a pile of debt or find yourself fighting to get your property out of foreclosure, it becomes necessary to find ways to reduce your out of pocket expenses.
Expect the Unexpected
No matter how new your home is anything that can go wrong will go wrong at some point. Expecting housing emergencies like bad plumbing, mold, a roofing issue, or otherwise, is ideal. You can start building an emergency saving account to cover incidentals such as those described, however, if you don’t presently have one another option would be to borrow the money. They even have loan alternatives for bad credit to get you the cash you need. You can use the money upfront to cover your emergency and pay it back in smaller amounts that fit in your budget. Having emergency savings or taking out a short installment loan saves you from abusing other assets like your home equity or retirement account which could cost you big if you fail to repay it.
Make Bi-Weekly Payments
You can start chipping away at that huge mortgage bill by making bi-weekly payments. Instead of making 12 payments by the end of the year, by breaking it up into 26 smaller payments you’re actually paying an additional month each year. This will reduce your principal balance and interest.
Keep Your Home Efficient
The older a property gets the less efficient it becomes. If your home is inefficient, this essentially means that there is money blowing out of the windows and cracks of your home. To reduce the cost of your utility bills, it is necessary to improve your home’s efficiency on occasion. This may mean sealing up holes and cracks that lead to the outside, installing new insulation, buying better windows, updating household appliances, and more. Though it will require a bit of money upfront, the savings are almost immediate and long-lasting.
Maintain Your Home
It may seem like a pain to have to keep up with things like the heating and cooling system, roof, and other parts of the home, but it’s with good reason. Failure to keep up with maintenance leads to bigger problems down the road. An unkempt furnace, for example, will result in higher heating costs and a need for a replacement. A neglected gutter system would essentially turn into roof damage, leaks, and foundation trouble. So, try to keep up with house maintenance on your own and when necessary hire a professional to help you out.
Become a Landlord
If your housing costs total more than 30% of your income you’re playing with fire. Since you don’t want to end up in debt or dealing with a foreclosure, you may need to make some changes. Becoming a landlord could work wonders. Having someone rent out a room or part of your house brings in extra money that can help reduce the costs.
You worked hard to get the house of your dreams, and you deserve to be happy. If the cost of owning your home has been weighing on you financially and emotionally, there are things you can do about it. The above-mentioned tips should be instrumental in helping you to slash costs and properly maintain your investment.