Managing Your Finances After Buying Your First Home

If you are young and buying your first home, it can be a very scary time in your life. However, it’s also very exciting to think that you are going to own your property for the first time ever. This is truly the American Dream at work! Chances are, your mortgage payment will be more expensive than whatever rent you were paying before you were a homeowner. You may be worried about how to budget after you close on the house, but you will catch on quicker than you think. If you couldn’t afford the house, the bank wouldn’t have given you the loan, so get ready to crunch some numbers and enjoy the first year living in your new abode.

Pay Attention to Your Lending Officer

Before your loan is even approved, your lending officer should sit down with you at the bank and give you a quick run down of the numbers. If they don’t, you should ask them to do so, or find a lending officer that will; it’s totally OK to shop around for lenders, especially in this economy. When you meet with your lending officer, don’t be afraid to ask questions and/or take notes. When you lock in your interest rate, they will tell you exactly what your mortgage payment will be, and if you choose to keep your taxes and homeowner’s insurance in escrow, they will calculate that in, as well. Pay attention to that monthly number, and use that to set your new budget.

Set a New Budget

Hopefully, if you’ve bought a house, you have already set some sort of budget for your living expenses pre-homeownership. If you have, it should be relatively easy to set a new budget that accounts for your increased living expenses. Just plug-in the number from the bank for your monthly payments and make adjustments as necessary. You will have to cut some things out; that is almost inevitable. However, make sure it is something you can live with. Spend less money on clothes, for example, rather than cutting your grocery budget in half. You need to eat!

Communicate with Your Partner or Roommate

If you are buying this house with your spouse or partner, or if you are having someone move in and pay rent, be sure to communicate expectations and concerns openly. This can make or break a partnership when it comes time to pay all that money at closing. When you figure out what everyone owes, make sure you tell everyone upfront. If you are having a renter live with you, it’s not a bad idea to draw up a lease arrangement and have a lawyer look at it. That can save you a lot of trouble down the road.

Learn to Cook

Cooking your own food can be significantly less expensive than eating out every night. When you cook, you often have lots of leftovers, too, which you can eat the next night or for lunch the next day. It would be such a shame to waste your new, awesome kitchen in your new house, so if you don’t already know how to cook some simple meals, now is a great time to learn how.

Find Free Entertainment

Entertainment is what costs most people the most out of their budget. Once you learn how to cook, you can also find some free or inexpensive entertainment options. Staying in can be fun, too. You can go to the library and rent movies and music for free, or visit your local park and explore your new town.

Buying Secondhand Saves Money, but Can Cost You Dearly

It used to be that there were three basic ways to find used items to buy―yard sales, thrift stores, and the classified section of newspapers. But nowadays, with the Internet bringing the world into your living room, people have access to a multitude of online yard sales and auctions. It’s hard to resist the lure of getting something used for pennies on the dollar compared to buying it new. In some cases, you can find a great bargain and get just what you were looking for while saving a little money. But there are some things you should always buy in person or brand new, instead of buying them unseen.

Computers
Yes, you can get what sounds like a screaming used system on eBay and other online sites, and you can save a lot of money by buying factory refurbished models from dealers and online computer stores. But many new computers nowadays are so affordable that there’s no real reason to buy a used system. With a used system you can’t get it customized to provide exactly what you need, and the technology will always be at least a little outdated. Because of the speed at which technology changes nowadays, it never pays to buy an old or used computer, especially if you plan to use it for work or anything important. Many mass-market manufacturers, including Dell and Compaq, offer entire computer systems for less than $500. They may not be the best built computers in the world, but at least everything is brand new and you’ll have a manufacturer’s warranty to back them up.

Appliances
One of the most risky large items to buy online can be appliances. Washing machines, dryers, refrigerators, gas ranges―you can find just about any used appliance out there for sale. But old appliances have no warranty or guarantee, and you can’t tell how well they will work just from a seller’s description and a photograph. Newer models of appliances will be more energy efficient and have more up-to-date technology, which will save money on utility bills. Shipping for large items such as appliances can also be expensive. If you really want to buy a used appliance to save money, the best way to do it is to see it in person, and preferably see it working, before laying out the cash for something that might not work when you get it home.

Strollers, Car Seats, and Cribs
According to the Consumer Product Safety Commission, every year at least 16 children die because of unsafe cribs. Some of those deaths are from cribs that are designed poorly, but many of them are from cribs that simply break down unexpectedly. The risk of your child being injured or killed isn’t worth the few bucks you might save by buying something online sight unseen. Strollers, car seats, cribs, and any other child-related merchandise should always be bought new.

High-tech Electronics
With the growing plethora of fancy electronic items taking over our lives every day, and the expensive tags they carry, it can be tempting to search online auctions for affordable digital cameras, DVD players, and even plasma screens. But because high-tech electronics usually have delicate mechanisms, even the slightest flaw can affect your enjoyment of the product, and that flaw might not be readily apparent. Older models of plasma screens, for example, may have images burned into the screen that you might not see right away. Electronics are also being continually updated, and the speed with which newer models are released is growing faster each year. You can buy brand new digital cameras cheaply that won’t have the highest pixel count and won’t have many of the fancy features new cameras offer, but you will have a manufacturer’s warranty, and sometimes you can even try them out in the store before buying.

Mattresses and Upholstered Furniture
Mattresses are particularly tricky to buy used, because you never know who has been sleeping on them, what has been spilled on them, or what type of home they were used in. Unless you know the person you’re buying it from, or you have access to a reputable company that can clean and disinfect it, you should never buy a mattress used. Upholstered furniture also carries the same risks. These items may come from homes with heavy smokers, cats or dogs, babies in diapers, people with chronic illnesses, flea or bedbug infestations, or any number of situations that could contaminate the furniture to a point where it makes your life miserable. Spend the money and buy them new.

Although there are hundreds of things you can buy used that will save you money and give you just as much satisfaction as you’d get from a new item, there are also hundreds of used things that could easily make your life miserable. With a little savvy and common sense, you can save yourself a lot of heartache―as well as money―by spending a little more and buying something new in the first place.