Smart Things for Homeowners to Do for Their Finances

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Nov 8, 2023

Owning a home: the American dream, right? It comes with the pride of a white picket fence, the joy of backyard barbecues, and the... uh, "thrill" of a 30-year mortgage. But beyond that monthly payment to your favorite bank, there's a whole world of financial wizardry awaiting the savvy homeowner. So, let's break down some smart moves you can make with your dollars and sense.

1. Buff Up That Emergency Fund

First thing's first. Before you start playing Monopoly with real money, you need a cushy emergency fund. Owning a home is like having a child that never grows up. There's always something – a leaky roof, a possessed HVAC system, or an army of ants deciding your kitchen is the next best thing since Antlantis. Ensure you've got enough cash stashed to handle life's little surprises without breaking a sweat.

2. Pay More, Owe Less

Here's a secret: that little extra you toss at your mortgage each month? It's doing backflips and somersaults to cut down your interest in the long run. Pay a bit more than the minimum, even if it's just the cost of a couple of lattes. You'll shave years off your loan and save a mint on interest.

3. Refinance Like a Finance Wiz

Interest rates bob up and down like a yo-yo. Keep an eagle eye on them, and when they dip, pounce on a refinance like it's Black Friday. A lower interest rate could mean a lower monthly payment or the chance to pay off your home quicker than you can say "I'm debt-free!"

4. Treat Yo' Self (to Home Improvements)

Think of home improvements as a twofer – you get to enjoy a spiffy new kitchen, and you boost your home's value. It's like investing in a stock, but instead of dividends, you get a jacuzzi tub. Just be wise about it. Gold-plated toilet seats might scream luxury, but will they really up your resale value?

5. Become a Landlord (Part-Time)

Rental properties are a solid property investment choice that can help bring in a high return on investment through passive income. Luckily, you don’t have to empty your bank account to purchase a rental property. Believe it or not, it is actually possible to buy rental properties with little to no money down.

6. Get Tax Savvy

Homeownership comes with tax perks, so don't miss out. Understand what deductions you're eligible for, like mortgage interest and property taxes. Keep track of home improvement expenses, too – they might come in handy when it's time to sell.

7. Energy Efficiency is Your Friend

Invest in energy efficiency. Solar panels, energy-efficient windows, or even a smart thermostat can slash your utility bills and may qualify you for some sweet tax credits. It's like the planet and your wallet holding hands and skipping together.

8. Insurance – Don't Skimp

Ensure your home and its contents are properly insured. And then, once a year, give that policy a once-over to see if you need more coverage or if you can snag a better rate. It's as essential as your morning coffee.

9. Investing Beyond Your Backyard

Yes, your home is an investment, but don't put all your eggs in one basket – or one piece of real estate. Diversify by investing in stocks, bonds, and mutual funds. And sure, even a sprinkle of gold can glitter nicely in your portfolio (and you can buy gold very easily these days). It's a tangible asset that's been a store of value since ancient Egyptians were building pyramids.

10. Retirement Planning Isn't Just for Old Folks

No matter your age, retirement should be on your radar. Max out that IRA or 401(k) like it's going out of style. The sooner you start, the more you'll thank yourself when you're older, grayer, and ready to hit the beach with a margarita in hand.

11. Declutter and Profit

Look around. See all that stuff you don't use? Sell it. Have a garage sale, list it online, or take it to a consignment shop. Decluttering can be cathartic and profitable. It's a win-win.

12. The Side Hustle Hustle

If you've got skills, put 'em to use. Freelance, consult, craft, or bake – whatever floats your boat. Extra income means more financial cushioning and maybe the chance to splurge on something nice for the house. Granite countertops, anyone?

13. Be a Debt Destroyer

High-interest debt is like a party guest who's overstayed their welcome. Show it the door with the debt snowball or avalanche method. Get rid of it, and you'll have more cash to play with for the fun stuff – like that outdoor kitchen you've been dreaming about.

14. Save for the Sprogs' Education

If you've got kiddos, consider starting a 529 plan for their college education. It grows tax-free, and when the time comes, you won't have to choose between Junior's tuition and a new roof.

15. Know When to Hold 'Em, Know When to Fold 'Em

Real estate isn't just about your primary residence. If you've got the itch and the cash, consider buying a rental property. Just do your homework first – being a landlord isn't for the faint of heart.

16. Stay Informed

The world of finance is as dynamic as a soap opera. Stay informed with podcasts, books, or blogs about personal finance. Knowledge is power, especially when it comes to your dough.

17. DIY or Die Trying

Learn to fix things around the house. YouTube is chock-full of handy (and sometimes not-so-handy) folks teaching you everything from unclogging drains to building decks. Not only will you save money on repairs, but you’ll also gain a sense of accomplishment that’s sweeter than any jam on toast.

18. Negotiate Like a Pro

Haggling isn’t just for flea markets. Negotiate your mortgage rate, your insurance premiums, even your cable bill. Companies often have wiggle room, and the worst they can say is no. Best case? You save a bundle.

19. Smarter Shopping

Join loyalty programs at places where you regularly shop. Those points and perks add up, and before you know it, you could be getting discounts on everything from groceries to garden supplies. Who doesn't love a freebie or a cheeky discount?

20. The Credit Card Game

If you’re disciplined with credit, take advantage of cash-back or rewards credit cards. Use them for your regular spending and pay them off in full each month. It's like getting a little rebate on life.

21. Home Warranty: Yay or Nay?

You may also want to consider whether a home warranty makes sense for you as a family. It could cover the cost of repairs or replacements for things like appliances and systems, but if you don’t have young children or pets, how likely is it that something will end up broken? Do the maths and see whether it would be smarter to buy the insurance or simply put a little aside just in case.

22. Stay on Top of Property Taxes

As a homeowner, it’s important that you take the time to really understand your property taxes and how they work. If you think they’re maybe a bit too high, don't be shy about challenging the assessment. Sure, it's a bit of a hassle, but it could lead to savings for years to come.

23. Know Your Home's Value

It’s always a good idea to keep an eye on your home's value and the market trends in your area at any given time, because it can significantly affect everything from your insurance, needs to your property taxes and your ability to refinance or sell profitably.

24. Learn the Language of Loans

Understand the nitty-gritty of your home loan if you want to save money in the long-term. What's the interest rate? Is it fixed or variable? Could you benefit from an offset account or a redraw facility? The more you know, the better you can manage it.

25. The Side Gig Saga

Need more income to run your home and realize your real estate dreams? Why not turn a hobby into a side gig? Whether it's crafting, photography, or even dog walking, it can provide a financial cushion and potentially turn into something bigger.

26. Financial Planning Isn't Just for the Rich

You don’t need a six-figure income to benefit from financial planning, especially if you own your own home. A session with a financial advisor can help you set goals, understand investment options, and plan for the future.

27. Seasonal Savings

Be sure to take advantage of seasonal sales for home-related purchases. Need a new lawnmower? Buy it in the fall. Want to redo the patio? Winter is your friend. Off-season shopping can save you a pretty penny.

28. Community Comradery

Take the time to engage with your local community. Why? Because neighborhood Facebook groups or apps like Nextdoor can be goldmines for finding free items, swapping services, or getting tips on affordable contractors.

If you own a home, then it is even more important than ever that you take good care of your finances, so you can keep your home and increase your financial stability overall. So, be sure to make an effort to keep on top of those financial aspects of life!

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