Unexpected home expenses is one reason why many in the personal finance space recommend homeowners have an extra-healthy emergency fund. “Small” unexpected expenses of $100-$300 can add up quick, and big expenses of $1,000+ can be tough to manage if they come out of nowhere.

Home expenses wouldn’t be terrible if there wasn’t a hundred other demands on our money. The cost of healthcare keeps rising, and with HSAs becoming commonplace consumers are on the hook for potentially thousands of dollars before their health insurance kicks in. Pets can get sick and result in a big vet bill. And for those with kids I don’t even need to mention how much of a bite kids can take out of your finances.

The purpose of this post is to list out potential unexpected home expenses to make them a bit more real. It’s easy for people to say homes are expensive without giving examples, but when you can picture what these costs actually are it can become more real.

I’m not trying to convince people to not buy a house. If anything I hope to motivate people to save a bigger emergency fund so they can deal with unexpected home expenses rationally. There is a clear difference between facing an unexpected $2,000 house repair with money in an emergency fund versus having no cash reserve to cover it.

I bought a fixer-upper seven years ago and I’ve learned a lot from the experience. My biggest regret was not having more cash in the bank when my wife and I bought our house. Not only did we face a number of unexpected expenses that I will mention throughout this list, but we also had a lot of renovations we wanted to do. Having cash in the bank would have taken away some of our stress in those first few years, and helped us stay calm as we faced never-ending home expenses.

Let’s dive into examples of unexpected home expenses to plan for. Some will argue that not all of these are “unexpected” because they are routine maintenance. While that may be true, people aren’t thinking about their homes 24/7 so even routine maintenance can come out of nowhere, especially if something is broken and you have no choice but to fix or replace immediately.

Roof

 
Roofs can last a long time, but they don’t last forever. Replacing even a small roof will run in the thousands. Another thing to think about is potential damage from snow and ice. Ice dams can cause serious issues.

Garage Door

 
The first year in our home the coils on our garage door snapped. Replacing them was a few hundred dollars, partially because we have a heavy garage door and partially because it was on the weekend. Garage doors can work for decades without issues, but there are a lot of components that can break and stop working.

Water Damage

 
Another fun story from my first year of home-ownership. We had a heavy rainstorm and the city’s storm drain was overwhelmed, pushing the water out to smaller drains throughout the city. Our basement had a foot of water outside the basement walkout, and water slowly was pouring into our basement. Thankfully we were home for this and could address it right away, but this happens to many people each year when they are away from their home, leaving serious damage. Even worse is water damage that happens behind the walls, sight unseen, since you don’t even realize it’s happening.

Water damage can be a minor inconvenience or cost you thousands of dollars in repairs, especially if mold is part of the issue. Sometimes there isn’t much you can do, but proactive things include installing drain tile and a sump pump in your basement, not putting carpet in your basement (tile and rugs are the way to go), and making sure your landscaping pushes water away from your home.

Structural Issues

 
A coworker of mine bought a house and started working on renovating the basement. When he pulled panels off one of the walls a gigantic crack became visible. Usually cracks aren’t a big issue, but this was a massive one. After consulting an engineer the solution was using a massive and expensive brace system to stabilize the house.

Thankfully he and his wife were able to recover the $15k-$20k bill from the previous owners for not disclosing the issue. This is an extreme example, but smaller structural issues can come up from things like termite damage and rotting wood.

Washer & Dryer

 
Pretty simple example – washer and dryers break! We had an older washer and dryer that I have done a couple minor repairs on, but eventually we had a problem that would have cost a couple hundred minimum to diagnose and repair so we opted for buying new ones. If you have a gas dryer you will need a professional to do the installation, which will run you at least a hundred dollars. You’ll have to decide whether you want to foot a couple grand for fancy new models (we did and don’t regret it) or get cheaper alternatives.

Sewer Drain-Out

 
Every house has a drain that goes from their house to the main sewer line. Some of these lines are made of clay. These lines can collapse. As you can imagine, it can be expensive to replace a collapsed sewer line because it oftentimes requires digging up a yard, street, and/or sidewalk.

This happened to us, again in our first year of home-ownership (we have good luck). Our first quote was over $7,000, and came from Roto Rooter. The repair person was high pressure and told me not to contact the city about it since there was almost zero chance it was their fault. I hired another plumber through Angie’s List who not only would have done the repair for $3,000 or less, he also consulted with the city and found one of their contractors made an illegal repair four years ago when a water main broke. This story is why I swear by Angie’s List and why I always advocate for getting multiple quotes on home repairs.

HVAC

 
HVAC stands for heating, ventilation, and air conditioning. Heating units break. Air conditioners break. Water heaters break. All these things cost money to repair and replace.

I have two friends with homes in the same cities as me who bought houses with improper ventilation in their basements. This is an issue because if the basements are finished or semi-finished, as they are in these houses, the only way to fix the issue is to rip out the ceiling and install the appropriate ducts. This typically is not something at the top of a new homeowners mind, but is just another example of an unexpected expense.

Work that involves hiring people in the trades such as HVAC specialists, electricians, and plumbers, isn’t cheap. There is a labor shortage and despite the potential for high pay, most young people would prefer a desk job. My point here is you should plan on spending at least a couple hundred dollars just to have someone in the trades come out to your house, and then expect potentially more costs for supplies and additional labor needed to fix your issue.

Driveway

 
The actual cost for installing a new driveway or replacing an old one is usually in the thousands of dollars. Our driveway is in rough shape and I didn’t take action as early as I should have. One way to delay the installation of a new driveway is to use cold patch to fill in potholes and then seal coat the driveway each year. I didn’t seal coat the first five years we had our house and I wish I had. It adds thickness to the driveway and will help prolong having to install an expensive new driveway, which I’m convinced would add little to no value to a house when you sell it.

I recommend going the DIY route for seal coating. It’s a messy job but it’s cheaper and it seems like more and more seal coating companies are pushing people to install brand new driveways. While that advice technically isn’t always “wrong,” from a personal finance standpoint I just don’t see the value.

Cement Work

 
You may have a cement slab in the back of your house, or even a cement driveway. Most people have some cement work around their house, and it can be expensive to replace for obvious reasons: it’s difficult to remove without machinery and it typically takes a cement truck and skilled labor to install.

Wasps, Rodents, and other Pests

 
We’ve had some wasps nests in our yard, and like most issues that require a professional to come out it has always been a couple hundred dollars for treatment and removal. Mice are an issue for many homes and the best way to fix the problem long-term is to find where they are coming in, which is easier said than done.

Kitchen Appliances

 
Similar to a washer and dryer, kitchen appliances can break and need repairing or replacing. High-end appliances are great, but this is where cheaper appliances win out. When your stove only costs $400 it’s easier to foot the bill versus needing a $1,000 replacement. Appliances can last a long time, but they eventually do break.

Plumbing and Electrical

 
Plumbing issues are more commonplace than electrical, but both can come up unexpectedly. One example of ours was replacing an old bathroom drain. To remove a bathroom drain you sometimes have to get a “key” that goes into the drain and unscrew it that way. Well…after multiple people tried to crank the drain loose we unfortunately had to call a plumber who torched it out. As expected, having a plumber come out can cost you a couple hundred dollars even for a simple issue.

The nice thing about plumbing and electrical is some things can be done yourself. You may not be able to install new shut-off valves yourself, but you likely can replace a toilet or sink yourself. Electrical work you obviously have to be very careful with, but with the proper precautions and training it’s not unreasonable for a homeowner to replace light switches and outlets. For anything even moderately complex, though, you will need an electrician. The reason why is because you want the work up-to-code and you want to protect yourself from dangerous situations.

Tree Trimming

 
I grew up in a newer development, so when I bought my first house in a neighborhood with mature trees I wasn’t quite ready for the thousands of dollars that tree trimming could run. The good thing about tree trimming is it isn’t typically absolutely necessary, and is more personal preference of whether the cost is worth it. With that being said there will be some situations where a tree or trees will become so overgrown you have no choice but to pay a professional.

 
This is not an exhaustive list (unfortunately!), but you get the point: as a homeowner the sooner you build an emergency fund, and the bigger you can build an emergency fund, the better.

Related: How Switching Banks Made Us an Extra $500+ a Year

This trend is partially due to the fact your money can go much further when you buy a home that needs work. I also blame HGTV and their numerous shows with mind-boggling number of episodes showing homes being renovated.

My wife and I are always looking to maximize our finances (partially due to our student loan debt), so a fixer-upper seemed attractive to us. We figured we could renovate the house over time, doing as much of the work ourselves as possible to build sweat equity.

It’s also worth noting we found a house that had an apartment with a separate entrance built into the basement, creating an opportunity for rental cash flow.

Seven years ago we purchased our fixer-upper. Literally everything needed to be redone, though it was definitely livable and not in terrible shape. But there was no denying the fact that it was quintessential late ’70s and early ’80s design, and not much had been upgraded since then. Bathroom, flooring, kitchen, deck, yard…everything needed to be redone.

We are still living in the fixer-upper we purchased seven years ago, and we still have some big projects left. We’ve also completed many projects in those seven years and learned a lot.

Here are 10+ things I learned from buying a fixer-upper.

Everything Takes Longer Than You Think

 
The thing about home repairs, renovations, and projects, is that they typically involve doing things you have never done before.

To take a simple example, think of how many papers you have written over the course of middle school, high school, and college. It becomes easier and easier to crank out papers as you gain experience writing papers.

Compare this to, say, replacing a light fixture or cutting and installing trim. The first time you do it is going to take longer than you expect. With a fixer-upper there are a ton of small projects. When each project ends up taking longer than expected (sometimes significantly longer), time really starts to add up.

Because I’m a generally impatient person I can’t say that I’ve learned to embrace the fact that everything takes longer than expected with home projects, but I have at least accepted it as reality. If you haven’t bought a home yet and are considering a fixer-upper, go into it knowing that things will take longer than you think.

Everything Costs More Than You Think

 
This is another thing I blame on HGTV. Sometimes the renovation budgets are way lower than they should be. I know I’ve seen bathroom and kitchen remodels quoted as $5k-$7k at times. Trust me, you will pay more if you are hiring out the work.

In general, everything with a home ends up costing more than you think, and that becomes abundantly clear with a fixer-upper. It’s a combination of both seemingly small expenses adding up, such as the cost of tools and materials, and bigger costs adding up, such as hiring out a bathroom or kitchen renovation.

First, tools and materials can really add up. These are costs that I personally didn’t mind as I knew even if I was paying $200 for tools I was saving hundreds or thousands by not hiring out work. Regardless, when you have little or no tools it can definitely feel like you are constantly spending money on them. Eventually this slows down, of course, as you build up your inventory.

Second, small things can cost money. Need a plumber to clear tree roots from your sewer line? That’s a couple hundred dollars. Need an outdoor outlet added? A few hundred dollars. Want someone else to do the sheet rock and mudding on a large room or basement you are renovating? Could easily be more than a grand. These costs add up and are easy to not factor in when you are in the purchasing phase of a fixer-upper.

Finally there are big expenses that you may choose to not factor in, but eventually have to bite the bullet. When we first bought our house I always thought I would gut and renovate our main floor bathroom. But…then I realized how incredibly time-consuming that project was, and the fact that each week it dragged on would be another week we have to go to the basement bathroom, and another week that we couldn’t rent the basement apartment. So I paid…$17 grand…for the bathroom to be renovated. This ultimately was one of the best purchases I’ve made in my life. Which brings me to the next thing I learned…

You Can’t DIY Everything

 
Since buying our fixer-upper I’ve published two books and never missed a beat with Young Adult Money, all while working a 9-5. Not surprisingly, what I’ve learned is that contracting out big projects like bathrooms, kitchens, and decks, can make a lot of sense.

Even with professionals working on our house nearly full-time, it took a couple weeks for our bathroom and basement kitchen (for our rental apartment) to be completed. They both turned out incredible and I’m very happy with the outcome. Looking back I know that if I had gone the DIY route it wouldn’t have turned out as nice and it would have been incredibly difficult to complete the projects without taking off many days from my 9-5 job.

Just because you hire out things doesn’t mean you can’t do big projects yourself. I cleared out 10-15 cubic yards of dirt from our backyard and built a 40 foot retaining wall using 80 pound blocks, which saved me probably more than $10,000. It was a big project, but I could take my time with it and it was more or less physical labor than some expertise such as plumbing or electrical that would have taken many hours to make sure I did the project right.

I also ripped out all the carpet and some hardwood on our main level and put in new flooring, trim, and doors. This was a big project (and I did take about eight total days off from work to finish it), but it was something I knew I could do if I spent enough time and effort figuring things out.

The smaller projects have paid off as well. Whether its swapping out light fixtures, outlets, or light switches, or swapping in a new toilet, these small projects are doable and save a lot of money over time.

Delaying Things Can Be a Big Win

 
The bathroom renovation was expensive, but it was a huge transformation. Friends have called it “an HGTV bathroom” and a “spa.” It was a total transformation, but it did cost us $17k.

What benefited us was delaying it. Our bathroom was old and needed help, but we put off the bathroom renovation for five years. That gave us time to save the money and pay for the renovation in cash. We would not have been able to do that right from the get-go after purchasing our home.

In fact, I’m always looking at opportunities to delay projects. Six months or a year of putting off a project is six months or a year of cash flow that isn’t diverted to a home project.

Yes, there are absolutely times where you need to make a change ASAP due to safety reasons. But many changes people make to homes are cosmetic or “nice to have.” After seven years we still haven’t replaced the tiny, unsafe deck we have that someone probably threw together over a weekend in the late 70s (one of the supports is literally floating). But as I mentioned earlier, everything is more expensive than you expect. It would be at least $10,000 to replace the deck, and when we replace the deck we also want to replace some stairs and redo some other things surrounding the deck. Each year we delay is cash flow that can be used to save, invest, and pay off debt. We make do with our cement slab outside our basement and think about all the money we are saving.

YouTube is Your Friend

 
This is kind of a “duh” statement, but YouTube is your friend if you are a homeowner. It’s incredible how many tutorials are on YouTube. I made minor repairs to our washing machine and dishwasher by using YouTube. I’ve learned how to use tools and complete projects by watching YouTube.

Stuck on a home project? Head to YouTube.

Crazy, Unthinkable Problems Can Come Up

 
With every home there are things that will be discovered later on that you couldn’t have anticipated. I went into detail about our sewer drain-out fiasco that nearly cost us more than $7k (read the story to see how we ended up paying $0 instead). Our basement flooded the first Summer in our home because our backyard drain between our house and our neighbors ended up pushing water out from the main storm drain (apparently this wasn’t the first time…).

I’ve accepted the fact that crazy things can happen with a home, and oftentimes they come with expensive repairs. Granted, when you aren’t planning on paying for a repair or fix it can feel like any dollar amount is expensive.

If you have a fixer-upper it’s more important than ever to build a healthy emergency fund. If you don’t have one, you likely will end up taking out a personal loan or going into credit card debt at some point, both of which aren’t ideal options. Which brings me to my next point: you likely need more cash.

You Likely Need More Cash

 
A few things we’ve established so far:

• Everything is more expensive than expected

• You can’t DIY everything

• Unexpected, often expensive, problems can come up

All three of these things point to needing more money than you expect. Unfortunately, buying a home can clear out a lot of cash reserves. If people have *almost enough* for the down payment, closing costs, and other costs involved in buying a home, they will often raid whatever cash they have left to push them over the edge.

So once you have bought a fixer-upper, you need to start saving ASAP. Cash on hand can help you sleep better and make more rational decisions when faced with potentially expensive home issues.

Even if you already have a healthy emergency fund, having money in stocks that you can sell if needed can be powerful. We’ve had years to build our savings up so I realize this won’t apply to everyone, but through participating in my employer’s stock purchase program we have a decent amount of stock we could sell if needed. We could technically sell our stock tomorrow and get a new deck built, but having those extra liquid assets is more important to me than having an expensive project checked off the list.

Decide What You Care About

 
Unless you have enough time and cash to renovate your entire fixer-upper right away, you need to decide what you care about. For example, our kitchen is still the late ’70s model that is just begging to be ripped out and replaced with some new white shaker soft close cabinets. But we knew that replacing our renter’s kitchen and our bathroom were higher priorities, so we’ve put off the upstairs kitchen for now.

Money obviously comes into play. You could care a lot about something – like a kitchen renovation – but the $30k price tag may make you reconsider. Spending a few grand on making your yard nicer may vault up your priority list.

Said differently, finding what you can and cannot tolerate is helpful. The old bathroom and the nasty carpet we had in the house gave me anxiety, so they were far up on my priority list. The ’70s kitchen, while not nice or practical, is “okay” for now.

Think About What You Will Do If Plans Change

 
One piece of advice that is often given to those considering switching from renting to owning is that you should be certain you will be staying in the same place for at least five years, otherwise you should keep renting. I generally agree with this advice, but let’s be honest: things change.

Think about what you would do if you had to quickly sell your house. This is definitely something I wish I had thought about more before buying our fixer-upper. I think we’d have trouble renting it without doing some bigger renovations, like flooring and bathroom, so we’d likely have to sell. We wouldn’t have much negotiating power, though, since we would have made few upgrades in that time.

Reflecting on what you will do if you find yourself in a situation where you need to move out will likely cause you to realize the more cash you have, the better. Whether that means putting off purchasing a home or still purchasing the home but saving aggressively will be a highly personal choice.

Learn As Much As You Can

 
Blood, sweat, and tears come with a fixer-upper. Projects can be intimidating and you may be scared to do something wrong. For example, it’s easy to think “I don’t want to tile the floor myself because I have never tiled so it may not look great.” But if you don’t tile the floor of your fixer-upper, when will you ever tile a floor? It’s better to take the plunge and learn the skill. Worst case scenario you have to start over, but at least you will learn a lot in the process.

Some people learn home-related skills growing up, but I have a hunch that a large majority of people didn’t. Whether they lived in a home that was already updated, or their parents never taught them, or they lived in a rental, there are many reasons why someone wouldn’t have learned home renovation skills. A fixer-upper is an opportunity to learn.

Yes, the main value in a fixer-upper is the increased value of the home, but I think the skills you learn throughout the process are also really valuable.

Completing Big Projects Feels Really Fricking Good

 
Building a 40-foot retaining wall was ridiculous and I’m not sure I would do it again. If I did, there’s no doubt I would outsource certain aspects of the project like having the dirt hauled off. Regardless, it feels really fricking good to know that I finished a big project and saved over $10k in the process.

I have a similar feeling about the flooring, trim, and doors in our house. It was a big project that was time-consuming, but it feels really good knowing that I went the DIY route. Back to the topic of learning, the project started slow as I got used to using a miter and table saw and the general process of laying flooring, but by the end of the process I was going much faster. It feels great to know that the next time I have a flooring project I can take it on with confidence.

A Fixer-Upper is *Probably* Worth It

 
The biggest question people have who are considering a fixer-upper: was it worth it?

I am just a single example so you have to take anything I say with a grain of salt, but I think in most cases a fixer-upper is probably worth it. I say probably because there will always be those examples where it was more hassle and more costs than it was worth it. If you are going into it with your eyes open, realizing that there are unexpected costs and inevitable frustrations, it probably is worth it.

Besides the expenses that will come up, the biggest warning I would give is the time commitment. I really struggled – and continue to struggle – to find time to work on our house. Everyone is busy these days, so it’s not easy to carve out hours and hours to work on a fixer-upper. You almost have to think of it as a side hustle in the sense that by doing work yourself and not purchasing a turn-key home you are saving money that you ultimately will get back when you sell the house down the road.

Whether you’re looking to pay off debt, save for retirement, or simply more wiggle room in paying the bills, most of us could certainly use an extra five to ten percent of our take-home pay back in our budget. You can do so by lowering your cost of living. Here are four easy ways to make your living situation more affordable.

1) Consider Where you Work

 
Should you live close to where you work, even if it’s more expensive? Well, it really depends.

Take where I live for an example – Seattle. It can cost hundreds, if not a thousand dollars more per month to live downtown near the city center. In comparison, places outside the city can be bigger and more affordable, while still having plenty of conveniences. In this case, living further away may result in additional time and money spent commuting, it may still be cheaper in the long run.

While that’s an extreme example, you can likely see similarities to where you live. It’s almost always more expensive to live downtown or in a popular business area because everyone wants to live there.

However, many of my friends in Seattle work and live downtown. They pay higher rents, but they forgo cars in favor of walking everywhere, live in simple apartments, or live with roommates. I know plenty of people who save a lot of money by living close to where they work.

So, it’s up to you to do the math to figure out if it makes more sense to live near work, or further away. Either way, you’ll likely have to make some compromises to find a place suitable (and affordable) for you.

2) Downgrade Your Space

 
When my husband and I moved from a small southern city to Seattle, we knew we had to lower our living expectations. Previously, we had been living in a spacious and modern two bedroom apartment close to work. We knew with Seattle prices, we would have to pay an astronomical amount for a similar apartment in Seattle. Since it was out of our control, we chose to lower our expectations.

We decided to prioritize a few features that were important to us, such as being within walking distance to stores and restaurants, and having an in-unit washer and dryer. While we liked having more space in our previous apartment, we decided to sacrifice that in order to find something that met our expectations.

With housing, you pay for all the features you get. If you want the perfect house or apartment, it will prove to be fairly costly. But if you can pick a couple of features that are must-haves and compromise on the rest, you’ll find many more options available to you within your price range.

3) Get a Roommate

 
I know not everyone is keen on sharing their space, but before you skip to the next section, hear me out. Getting a roommate is hands down the fastest way to lower your living expenses.

When I first graduated college a number of years ago, I had rented out my own apartment. My income was small, but I convinced myself I deserved to have my own place. Even though I could “technically” afford it, I found that I wasn’t able to make much financial progress anywhere else. So after my lease was up, I decided to move back in with roommates, and it was the best decision I could have made.

With that one small decision, I ended up saving over $500 a month in living expenses (plus, with roommates, I could afford a much nicer apartment). Not only did my rent lessen, but we split the water, electricity, trash, and internet bills, which saved me a lot of money as well.

Finding a roommate may not be the most popular answer, but it is one of the simplest ways to lower your living expenses. Just be sure to fully vet anyone before you move in with them to ensure you will get along.

4) Move to a Less Expensive City

 
Finally, if you’ve tried everything and are still struggling to make ends meet, then it may be time to consider more drastic options.

It can be incredibly challenging to come to terms with, but sometimes, it may just not be worth it to live in an expensive city.

When we moved to Seattle, I was absolutely shocked at the price of rent and homes. Thankfully, we moved to the city for work and had cost of living increases factored in, so it lessened the blow slightly. Had we not had that, I don’t know if it would have been worth it for us to move.

Don’t get me wrong – I love living in a major city and am so thankful to be able to afford the lifestyle that comes with it. But for some people, it can be tough to make ends meet with increasingly high cost of living expenses.

If you still are having a difficult time affording your living situation, you have a couple of options. One would be to move to a less expensive area. Relocation and uprooting your life isn’t an easy decision, but it could certainly ease the financial burden.

Secondly, you could work to side hustle to increase your income. This is still something I do, and the extra income helps me reach all of my financial goals significantly faster than if I just relied on my 9-5 income. If you’re committed to living where you live, then you may want to consider ways to increase your income to be able to afford it. Trust me, the burden of not having to worry about how you will pay your next bill is so worth it.

 
Related:

• House Hacks to Save Money on Heating Costs

• 5 Ways to Save For a House Down Payment

 
 
Have you ever tried one of these tips to lower your living expenses? What other creatives methods have you tried?
 
 

Fixer uppers are a lot of work – more work than most people realize. Not only do they take a lot of time, but they can require a lot of financial investment upfront.

On the other hand, many people invest in fixer uppers because they know they can increase their equity in the home. Some people even make a career out of taking old homes and “flipping” them into fresh and nearly new abodes. Plus, with the real estate being hot right now, more people are going to be looking for fixer-uppers.

So, should you buy a fixer upper? Here are a few things to consider.

1) Location

 
You may have heard the saying “Location, location, location,” but it truly is one of the most important factors to consider when buying any home.

After you buy a home, there’s a lot you can change. For instance, you can paint the walls, change the windows, and adjust the landscape to your liking. But you can’t change the location. For working individuals or couples with children, finding a location in a good neighborhood within a reasonable distance to school and work is usually a top priority.

So whether you’re considering buying your own fixer upper to stay in, or to flip and then sell, consider location above all.

2) Your Time

 
Fixing up a house that needs extensive TLC is not for the faint of heart – or for the busy.

Renovating a home requires a significant time investment, and projects nearly always take longer than expected. If you’re crunched for time on a regular basis, you may need to consider forgoing the fixer upper, or hiring contractors to complete the work, which is usually more expensive.

3) Home Layout

 
You can change a lot about a home. While you can change some parts of a home’s layout, the more you change, the more expensive it will be.

Before you buy a home, take a hard look at the core of the house. What makes the house unique? The more you can work with the core layout of the home, the less money you will have to spend.

4) Number of Rooms and Baths

 
Of course, a house has to be practical for you and your family. Don’t overlook the number of bedrooms and bathrooms you need in order to be a functional family.

For investment purposes you may want to consider whether or not there is a possibility of adding another legal bedroom. In the US a legal bedroom needs to have a permanent closet and if it’s in the basement should have a window or door in the room that can be used in case of a fire.

5) Decide How Long You Can Live Without Repairs

 
When you first walk through a fixer upper with your realtor, you may be dreaming of the possibilities. While that vision is imperative for anyone undertaking a massive renovation project, it’s important for home owners to be realistic about how many renovations they can afford at once.

Just like with any major purchases, you’ll need to prioritize your renovation projects if you aren’t able to complete them all at once.

As you prioritize, you’ll have to think about what projects are the most urgent – and what projects can wait.

This might mean you have to live with an outdated bathroom or an incomplete backyard for a few years until you have enough in savings to finish the project. If you can live

6) Your Savings Rate

 
Every renovation requires you to save. And the bigger the renovation, the bigger the cost.

Before you buy the biggest fixer upper on the block, don’t forget to consider how much you can actually save for renovations. If you have other, more pressing savings goals, then maybe a fixer upper isn’t in the cards for you. Or, you can always start a side hustle and use the extra income to complete a few renovations.

7) Your Skill Set

 
If you’re planning to save money by doing home improvement projects yourself, you may want to give your skillset a second consideration. While anyone can learn how to fix up a home, if you’re learning as you go, that can slow down your progress. If you’re looking to fix up a home fast, you may want to consider hiring additional help to move the process along.

However, if you do want to brush up on your home improvement skills, there are plenty of ways to do so. For example, Home Depot often offers how-to classes and workshops, so you can learn how to complete a task in a hands-on practice. YouTube also offers how-to guides on just about anything – you just have to be patient and set aside time to actually learn.

Related:

• 5 Ways to Save For a House Down Payment

• 5 Ways to Prepare For Buying a Home

• How to Compare and Buy Home Insurance Online

 
 
Would you consider buying a fixer upper? Why or why not?
 
 

But for many the path to home ownership can be confusing. After all, buying a home isn’t something people do that often, so there are many first-time home buyers.

As the housing market fluctuates, the importance of having a solid foundation and the right knowledge is key for first time home buyers to make sure they are making the right choice.

Starting your journey into home ownership is exciting and comes with many questions on how and where to start as well as how to make the right decisions throughout the process.

If you’re thinking of buying a home in the near future, these five tips can help you make sure you are fully prepared for your home purchase.

1) Set a budget

 
Like any goal you set that requires an investment, setting a home buying budget that is unique to your situation is crucial.

The budget you create will help you in several key areas in your home ownership journey such as helping you determine your needs vs. wants, narrowing down the areas you are interested living in, and setting up a timeline and an action plan that keeps you on course.

To begin, check out websites such as Zillow, Trulia and Realestate.com to see what your budget affords you in the areas you are interested in.

Set up a budget to help you save your intended amount by your target date. When calculating your home saving plan be sure to include moving and closing costs as these are expenses that are often overlooked, in addition to these 10 expenses when buying a home.

The amount you take out in a mortgage is an important thing to consider as it can potentially take up a significant amount of your monthly income. A good rule of thumb when planning for your monthly mortgage payments is that the payment should not be more than 30% of your take-home income. This way you will be able to afford other expenses and financial goals in addition to your mortgage.

If you are interested in learning more regarding government loans and home ownership programs, the United States Government offers loan options through The Department of Housing and Urban Development and The Federal Housing Administration. Several programs and loan options are available for those who qualify. The requirements are well worth a deeper look as you research financing your home. You can also ask your loan originator which ones you qualify for. Learn more about your loan options at the official U.S. Government website.

2) Make a Savings Plan

 
It goes without saying that money is a top priority in being able to purchase a home of your own. Nonetheless, saving such a large amount can seem like an overwhelming challenge.

A down payment is a portion of the total cost of a home that you will pay with your deposit. The remaining amount is the mortgage on the home that you will pay each month. The standard down payment on a home is 20%, though there are loan options to pay less than that (sometimes significantly less).

To begin or to bolster your savings plan, set your goal amount and target date by asking yourself questions to assess your true needs and desires in home ownership. Having a strong reason for taking on the project of home ownership keeps you motivated through the ups and downs of the journey. Once you have set your amount, complete a full review of your finances every three months to assess what you can minimize or cut out to increase your saving power and ensure there is no monetary waste.

Set up a budget and automatic transfers to a dedicated “home savings account” to help you save your intended amount by your target date. Also, investigate adding additional sources of income to your savings plan. To see some great options for how to make extra money on top of your 9-5, check out the ultimate guide to side hustling.

3) Check Your Credit Score

 
Another factor that plays a massive role in your ability to buy your first home is your credit score.

Your credit score is a summary of your financial history and is presented in a number that ranges on a predetermined scale from one of the credit score institutions. This number is a prominent factor in determining mortgage and loan rates when purchasing a home. It is extremely important to know this magic number and work towards getting it as high as possible.

Equifax, Experian, and TransUnion are the three nationally recognized credit reporting companies that house your credit score.  You are entitled to a free credit report annually from each of them and should request this to strengthen your financial home ownership plan. The credit report does not have your credit score on it, but it gives you a detailed snapshot of your history with these institutions. You will need your actual credit score as well to get the full picture of your financial history. Learn more about how to check your credit reports and be sure to keep up to date with this essential information.

The good news is that there are ways to obtain your credit score for free. Credit Sesame is one of those sites, and many have used it to access their credit score. In addition, credit cards that offer free credit score updating on your monthly statements are abundant. Be sure to see if your current credit card offers this or see if it is offered if you are opening a new credit card.

If you find that your score needs some work, add building your credit score to your list of things to do in preparation for buying a home. Be mindful of the things that affect your credit score such as being late or skipping payments on bills, using more than 30% of your credit card limit and not having a good mix of loan types and active credit cards. Read up on fantastic tips to improve your credit score here.

4) Check Your Debt-to-Income Ratio

 
As a young adult there can be a build-up of financial responsibilities that can become a stressor on your home ownership dreams. One well known and major financial burden is student loan debt.

If you have a large amount of student loan debt and you’re wanting to purchase a house, the Debt-To-Income (DTI) Ratio can certainly cause issues with your home ownership plans. Your DTI ratio shows lenders how much your monthly debt commitments take from your monthly income. This ratio is important because it provides lenders with a more accurate snapshot into your ability to pay your monthly mortgage and other household responsibilities. If this ratio is too high, it may hinder you from receiving mortgage approval as your lender will include your potential mortgage debt in their calculation.

To calculate your DTI, divide your monthly debt obligations that happen every month such as student loan payments, car payments etc. by your gross (pre-tax) monthly income.

If the calculation is too high, you have a couple options. You can increase your income either at your 9-5 you can lower your DTI by increasing your income monthly (side hustles are great to help in this area) and by lowering your debt amount faster by increasing your payment amounts. Use this spreadsheet to track your student loans.

5) Don’t Rush It

 
Buying a home can also be a pressure-filled decision. At times, it may seem like it is just the natural thing to do at a certain stage in your life especially if others your age or close to you are doing the same. However, taking on the responsibility of home ownership is not one to take lightly or be rushed.

Continue to do your research, stick firmly to your set budget and be diligent with your savings plan. When you encounter low points in the process focus on your initial reason for embarking on this journey in the first place.

While it may not always be easy, especially with a market that constantly fluctuates, you need to determine what makes it worth it for the long haul. Create a list of pros and cons of home ownership and speak with professionals in the real estate and finance industries who can help you fine tune your home ownership vision.

 
Related:

• Finally! An Automated Budget Spreadsheet in Excel

• The Best Ways to Save for the Down Payment on a House

• 100+ Ways to Improve Your Finances

• The Ultimate Personal Finance Checklist (with Free Download)

• 52 Week Money Challenge Spreadsheet and Printable

 
 
What is your view on home ownership and why? If you are a home owner, what was most helpful for you on your journey?
 
 

Sure, there is the whole rent vs. buy debate, but at the end of the day, many people want a place to call their own. A place where you don’t have to ask someone if you can put a nail in the wall.

It can a dream to buy a house one day, but with the home market rising in cost in many places, it can be hard to figure out how to come up with a down payment for a house.

The home buying market varies in terms of costs and requirements. If you’ve spent time researching housing costs, you’ve probably read some tips on how much to save for a down payment. Putting a down-payment of 20% of the house’s purchase price is the rule of thumb in order to avoid paying PMI (private mortgage insurance) on top of your mortgage.

No matter what percentage of the house’s purchase price you put down, you can almost guarantee it will be a hefty amount. If you want to be fully equipped to save and reach your house down payment savings goal, here are few things to do.

1) Get on a Budget

 
It can be easy to think you don’t have any extra money to save towards a house down payment. When you’re contending with things like debt and high costs of living, saving a big amount of money can be overwhelming at first glance.

However, the first step to reaching any savings goal is to know your cash flow, the income you have coming in and the expenses that are going out. Start tracking your spending to see what you can start working with.

Once you have figured out your cash flow, get on a budget. Check out our free automated budget spreadsheet for a way to quickly budget but still stay close to your spending and really understand it.

Try meal planning in order to cut down on food costs. Cut the cord so you don’t have to deal with a pricey cable subscription. Prioritize what’s important to you and what the nice to have vs. need to have expenses are.

2) Open a New Savings Account

 
I love creating separate savings accounts for different goals I have. I have one for my emergency fund, one for travel, and another for immediate savings.

There are several good reasons to open up a new savings account for your house down payment, preferably one that isn’t at the bank where your regular checking account is. Most traditional brick and mortar banks have not so great interest rates on their savings accounts.

Online banks, however, have interest rates on their savings accounts that are way higher than the national average. They’re able to offer higher interest rates because they don’t have physical locations to manage like brick and mortar banks.

3) Save Windfalls

 
While you may not magically get a big inheritance out of nowhere, you could get bonuses at work or extra income through something else. Have a savings plan for any bonus income you get.

Windfalls of money, no matter how big or small will get you closer to your house down payment savings goal. Maybe you’re able to sell some things around your house in order to make some extra money. Whatever the case, put the money in your dedicated savings account so you’re not tempted to spend all of it.

4) Increase your 9-5 Income

 
Increasing your full-time job income can be one of the most beneficial things towards improving your finances. Look for ways you can grow your 9 to 5 income.

Consider taking on more responsibilities at work. Learn some new skills to increase your marketability. Outline what you’ve done to help your company succeed and use it to negotiate a raise.

Use tools to compare salary data to use in your salary negotiations. Look at how salaries compare across different companies. Make connections with others to find out about new opportunities.

5) Start a Side Hustle

 
There is only so much you can cut back in terms of expenses. Sometimes increasing your salary at your full-time job isn’t always an option. Enter the side hustle.

If you’re really wanting to supercharge your house down payment savings, then picking up a side hustle is the way to go. In DC’s book, Hustle Away Debt, he talks about how to find, start, and grow a side hustle.

Saving for a house down payment can be a long process. Having a side hustle can help you make more money and accelerate your savings, as well as have a cash cushion for when unexpected expenses come up. An added bonus is that you get to explore new interests and learn new skills in the process.

Final Word

 
Saving for a house down payment isn’t an easy process. If you’re juggling a small income with debt, which many millennials are, then it can feel like a never-ending process.

Make a point to set down and determine a timeline for your house goal. Breakdown your final savings goal into smaller mini goals for you to hit so you don’t feel overwhelmed. Utilize financial technology services to your advantage. Research to find out if there are down payment assistance programs in your area. Be proactive.

 
 
Are you planning on buying a home? How are you saving for a house down payment?
 
 

As I’ve learned from relocating to different places, in order for a move to go as smoothly as possible, you have to plan and budget it accordingly. While there is no need to go full type A and plan out every little detail, doing some preparation can be beneficial and save yourself from further frustration.

If just the thinking about the thought of moving gets you nervous, then it’s in your best interest to get your moving tasks in order. Your sanity, budget, and time will thank you.

Things always seem to get lost or forgotten in the process of relocating to a new place. The last few times I’ve moved, I’ve always had to spend way more than I anticipated on things like trash bins, cleaning supplies, unexpected fees, and other small things.

To make your move easier, give a few of these things a try.

1) Declutter

 
When you get settled into a place, things always seem to start to pile up. No matter how careful I’ve been, I’ve always amassed a few things in every place I have stayed in that I really didn’t care for.

It usually doesn’t make sense to bring every single thing you own with you in a move. There is bound to be a few things you can toss. While you’re in the process of packing, set stuff aside that you’re not sure about keeping. Revisit the stuff once you have packed up all your stuff.

Decide what is and isn’t worth to keep. Donate the rest. Give things to your local thrift store or Goodwill. Consider having a yard sale or selling some of the stuff on Craigslist in order to make some cash.

2) Stock up on Supplies

 
You do not have to buy moving boxes. They can an unnecessary expense for something you can otherwise get for free. Visit your local grocery store or liquor store to see if they have any boxes they can give away.

The last time I moved, I was able to get several boxes from my local grocery store, saving me money that I would have spent had I purchased boxes from a shipping supplies store. Some of the boxes I got where wine and alcohol boxes which had separators in them that were perfect for storing my fragile items.

Remember to add up the cost to purchase things like permanent markers, labels, bubble wrap, tape, and rope.

3) Decide How You Want to Move

 
Do you want to stuff everything in your car or rent a U-Haul in order to move everthing? I’ve done it both ways. Back when I was moving into my first apartment, I crammed everything I had into my little sedan. It worked out since I didn’t have much furniture to my name and gave away several things I didn’t want.

Decide if you’re going to pack everything in your vehicle, rent a U-Haul or hire professional movers. Consider the distance you’re moving, like if you’re going to be relocating to a different state or somewhere far away. While it can be cost-effective to go the do-it-yourself route, think about stuff like heavy furniture and the amount of time you have for the move.

4) Update Your Address Details

 
One of the most frustrating parts about moving is having to update your address details for everything including bills, insurance, bank, memberships, and subscriptions.

Updating your details for all of these can take time. Putting in a change of address via the post office can be easily done online in a few minutes. It’s quick, simple and ensures your mails get delivered to you.

5) Practice Good Money Management

 
Moving tends to make everything go down the drain, including your finances. Admittedly moving isn’t going to be easy on the wallet, but don’t let it make you abandon your money management during the process.

If you know well in advance that you will be moving, then start setting aside dedicated savings to help pay for moving costs. There are a lot of unexpected moving costs that can seem to come out of nowhere.

Paper towels, toilet paper, and cleaning supplies are often forgotten costs. Make sure you account for things like installation fees, utility deposits, pet fees, parking costs, and other expenses. While some of these costs are expected among frequent movers, they can sometimes be higher than anticipated.

Having dedicated savings for your move will help you. I’ve utilized financial tech resources in the past to help with my moves. Apps like Ebates and Ibotta help you earn cash back. Every little bit counts in helping to cover the cost of a move.

6) Meal Plan

 
Food spending can get out of hand when you’re moving. Packing up things like pots and pans usually means you’re left with the options of leftovers or take-out. Protect your wallet by planning out your meals and what you will eat in the days leading up to your move and for the first few days after your move.

While you don’t have to organize every last meal you will eat, it is good to at least know some simple recipes and foods you can eat. Moving is stressful, so naturally you’ll want to cave in and order take-out at some point. Allocate a set amount for food spending and try to stick to it as much as possible.

Know your weaknesses. If you have a feeling you will be ordering a lot of take-out, then budget for it so you don’t feel too bad.

7) Shop Small and Thrifty

 
You might have a tendency to buy the things when you move into a new place. Resist the urge and start small. Focus on the essentials first like a bed, table, and place to sit.

Get thrifty and browse your local thrift store or Craigslist to find things like furniture and kitchen appliances. There are some things I will always buy new like a mattress, but plenty of things can be bought secondhand. Doing so will help you save money on furnishing.

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There are many steps to moving, so it’s alway best to take the time to get yourself organized. Review all of the steps above so you’re not running around at the last minute to do everything. A little planning can go a long way and give you peace of mind.

 
 
What steps did you take when preparing to move? What things did you do to prepare for a move?