The Countdown To Better Financial Habits Starts Now
We’ve all experienced that post-holiday January rush to set New Year’s resolutions. Proclaiming “this year I will” . . . read more books, have more life balance, or the ubiquitous, get in shape, only seem to fade with February’s arrival. And while we can’t help you with a workout routine, at Sierra Sotheby’s International Realty, we want to inspire you to tackle a critical financial item many overlook — budgeting for home repairs, upgrades, and holding costs.
According to market research firm Ipsos.com, “The vast majority of homeowners, 74%, say they pay for home repairs as they arise or have no plan to pay for maintenance projects. Just 20% set aside money regularly or create a yearly budget for their home maintenance.”
Planning and staying on top of your 2024 budget will empower you and prepare you to achieve your financial goals. Here are our top insights:
Eliminate Financial Surprises:
Your furnace has about four years of life left, and you’ve always wanted to update the kitchen. But are you regularly earmarking funds to cover these costs or hoping you win the lottery?
Realtor.com states, “Homeowners should budget 1% – 2% of the property purchase price annually for repairs and maintenance.”
And with extreme Lake Tahoe/Reno weather conditions, homeowners may consider increasing that amount.
- A home warranty may provide savings for future repairs. Ask our skilled real estate advisors for recommendations.
- If retirement is on your horizon, asses future home repairs and maintenance to avoid surprises as you transition to a fixed income.
When Change Is Good:
Now is the time to read over your home insurance policies and documents. Planning for cost increases can benefit your wallet now.
- Are you turning 65? There may be new discounts available to lower your monthly housing costs.
- Evaluate your home insurance policy for accuracy and potential discounts.
- Are you interested in paying off your home early? A conversation with your lender may provide positive options.
- Review family trusts and life insurance policies to ensure all your assets are included.
Beyond The Shoebox:
It’s easy to jot down numbers for your annual budget. It’s another thing to maintain them. Here are some helpful tools to ensure you stay on track:
- Commit to utilizing an online budget system to track your income and expenses.
- Meet with your financial advisor to analyze potential homeowner deductions or tax benefits.
- Schedule an end-of-month finance meeting with yourself to track your budget. It’s far easier to make minor adjustments than sweeping changes at the end of the year.
- Utilize apps or personal finance software to scan paper documents (no more shoebox of receipts).
Put Your Cash To Work For You:
If purchasing your first home, investment property, or vacation getaway is in your future, having a detailed financial plan can prevent over-extending your budget with these tips:
- A qualified CPA can review potential tax incentives or costs.
- Meeting with a lender early can place you in the driver’s seat regarding home loan options, especially in a high-interest-rate market.
At Sierra Sotheby’s International Realty, we believe in empowering our clients. We welcome the opportunity to make qualified recommendations to help you achieve your next home purchase, sale, or investment.
Creating and implementing a budget before the New Year ball drops will provide a financial compass to help build wealth and minimize financial “surprises.” Most of all, a budget that includes a line item for home repair costs, increases in HOA fees, insurance, and property taxes, plus that new kitchen you’ve always dreamed of, will give you peace of mind . . . . and more time to check off those New Year’s resolutions.