Being a new homeowner can be one of the most exciting times of your life, and rightfully so. Owning a home is nothing short of an accomplishment, but the excitement can quickly be dampened by the reality of the costs associated with the maintenance and upkeep of a home.
We’ve curated some of the money-saving tips especially for new and upcoming homeowners to ensure you avoid becoming another first-time homeowner horror story.
1) Create (and stick) to a budget
Managing your money can get tricky at a certain point. And having a budget allows you to have a far clearer understanding of your financial situation. When you have a clear and accurate idea of your available budget, you’ll make better, more informed choices on spending your money.
Overspending is the biggest mistake that new homeowners often make, and budgeting is one of the best ways possible to prevent overspending.
What truly makes a budget work is having specific goals or ‘buckets’, such as saving for a specific investment, renovation, down payment on a second home or paying off a mortgage.
A budget also gives you the clarity to identify areas where you can cut back on excess expenditures and redirect your precious cash and capital into more productive uses.
In addition, a budget also helps new homeowners to prepare for unexpected expenses. Owning a home comes with many unexpected costs, such as repairs or emergency home maintenance. Having a budget can help new homeowners set aside money for these unexpected expenses and not be caught off guard.
Finally, having a budget can also help new homeowners to improve their credit scores. By creating a budget and sticking to it, new homeowners can demonstrate to lenders that they are responsible and capable of managing their finances. This can help them to qualify for better interest rates on loans in the future.
2) Control your lifestyle costs
The little items can really add up over time. That morning latte or frappe, cakes or pastries, and even ordering food deliveries can all add up at the end of the month. Ohmyhome CPO Race Wong said something to this effect here.
Replacing these lifestyle expenditures with more affordable alternatives like cooking at home, instant coffee or even homebrewing can easily achieve the same goal – and won’t make as much of a difference to your lifestyle as you expect.
The financial benefit it offers to your wallet is also a nice plus.
New homeownership comes with many responsibilities such as mortgage payments, property taxes and maintenance costs that can add up quickly and put a strain on your budget. By cutting back on going out for meals or shopping for new clothes, they can free up much-needed capital and money for more important uses.
Building an emergency fund is also crucial, unexpected expenses like major home repairs or medical emergencies can be far better dealt with a prepared financial cushion.
From cutting energy costs to finding the best deals on home improvement projects, there’s a variety of ways to make your homeownership that much more affordable (and enjoyable). So, read on and start saving!
3) Look out for wear and tear when viewing homes
Here’s a non-exhaustive list of repairs to look out for when viewing a home:
- Plumbing: Look out for leaks or drips in faucets, toilets, and pipes. These can lead to water damage and mold growth if not fixed promptly.
- Electrical: Check for any loose or frayed wires and look for any signs of electrical shorts or sparks. These can be dangerous and can lead to potential fire hazards.
- Walls and ceilings: Look out for any cracks, holes, or signs of water damage. These can indicate structural issues or leaks, and should be addressed promptly.
- Flooring: Look out for any loose, warped or cracked flooring. This can indicate issues with the foundation or moisture damage and should be addressed promptly.
- Doors: Check the functionality of all doors, including entry and exit doors, windows, and sliding doors. Look out for any signs of warping, cracking, or difficulty in opening and closing.
4) Get thrifty with home decor
When furnishing your home, the simplest, most convenient route is to opt for the major home furniture franchises, but you may very quickly discover that the prices can be higher than you expected. This is the case even for the more reasonable furniture.
It’s best to always opt for a furnished or semi-furnished home. However, it’s perfectly okay to furnish the home on your own! It can be a really fun and fulfilling experience.
Alternatively, you can consider going DIY on some of your home improvement projects. Even a simple move like getting a vintage lamp can make a huge difference to the vibe of a whole living space.
Here are several ideas on how you can go DIY on home decor:
- Adding greenery to your space: Plants can be a great addition to your living space and can be a whole new world to explore if it happens to be an area which you are passionate about.
- Flowers: Adding flowers in your space is a great way to add color and texture without spending a lot of money, although caring for them can be tricky. Real flowers don’t have the longest shelf life, so they’ll need to be changed routinely. (So fake ones will do, to be honest.)
- Arts & crafts: Instead of expensive decor items, new homeowners can create their own home decor, like a polaroid photo wall, pallet furniture, macrames, wall art, chalkboard walls, and driftwood.
- Second-hand or vintage items: Furniture and decor items can be expensive, but by shopping for second-hand or vintage items, new homeowners can find unique and stylish pieces at a fraction of the cost.
- Renting or borrowing: Instead of buying new items, new homeowners can consider renting or borrowing items from friends or family. This can be a great way to try out different styles without committing to a purchase.
- Upcycling: New homeowners can also consider upcycling items they already have to give them a new life and purpose. Ideas can range from glass and plastic bottles, curtains or old furniture covers, to mason jars.
One other tip to keep in mind is to take advantage of sales and discounts. Decor items that are going on sale can offer truly attractive prices for incredibly beautiful options.
6) Save on agent commissions
Your biggest cost right away will be paying an agent’s commission to help you secure your home. With the typical fee being 2% of the purchase price, a $500,000 home already costs you $10,000 upfront.
However, if you decide to use Ohmyhome’s Buyer Agent Service, you immediately save half. We only charge 1% of the purchase price so that’s a $5,000 savings in this case.
Plus, if you’re planning to buy a private property, we have an even better deal, 0% commission and free of charge. This is an especially good deal when condo prices are easily in the 7-figure range, you’re talking about tens of thousands in total savings.
Get in-depth tips on how to afford your property from a financial advisor:
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