- #1 -- Going large
- #2 -- Extravagant outdoor improvements
- #3 -- Bad insurance choices
- #4 -- High energy consumption
Buying a new home is a milestone. It truly is!
New homeowners have secured an asset which they hope to enjoy for years. But, as a new homeowner, you could be pouring money into liabilities at the same time!
So, before you pop the bubbly, make sure you avoid these four common areas that new homeowners waste money on (besides an overpriced bottle of bubbly):
#1 — Going large
It’s great when your bank approves a bigger loan than you expected, but that doesn’t mean you must spend the full loan amount!
Choose a home that you can grow into, but won’t give you wasted space. Save money by selecting a house with the right amount of bedrooms, storage space, and living areas.
It beats buying a huge house that you battle to fill.
Another pitfall is unnecessary additions to the house.
For example, sunrooms or entertainment areas you won’t often use. These could drain your funds without adding much value when it comes time to sell.
Besides, all that extra space will need more furnishings & fittings, and before you realise it, expenses start to snowball.
Don’t go down this road!
#2 — Extravagant outdoor improvements
Avoid putting piles of cash into creating an opulent outdoor space.
Everybody loves showing off a beautiful yard, but new homeowners often miss out on ways to save here. Don’t choose the first garden service that presents itself.
Even better, if you have a couple of Saturday mornings available, do it yourself: buy a decent mower and a bag of fertilizer.
And, get the family involved – you could save thousands and your family will love the quality time you’ve spent together!
Before installing a swimming pool, make sure to weigh up the investment.
You may love the idea, but a pool doesn’t always add value in the long run.
Many potential buyers prefer garden areas without them. There’s also the ongoing maintenance!
If you will only use your pool a couple of times a year, you might be throwing your money into a hole in the ground.
#3 — Bad insurance choices
Many banks grant loans on the condition that the buyer takes out insurance to cover the bond repayments. It might be worth shopping around rather than using the first insurance package the bank suggests.
Also, when moving to a new place, shop around in the new location for household insurance.
If you had cover for your old property, check whether your provider is still relevant and competitive, or old and outdated.
When buying new appliances, don’t feel pressured into taking extended warranties (aka “appliance insurance”). Often the standard warranty is more than enough.
#4 — High energy consumption
Old, cheap light bulbs consume a lot of electricity. The same goes for geysers, which are set too high.
Give your new home a thorough energy inspection to economise your usage.
Hopefully, by following these steps you’ll have cash left over after moving in. Enough to crack that sensibly-priced bottle of champagne!