My brother and sister-in-law are beginning 2007 as first time home owners. In previous blogs I addressed the importance of developing a comprehensive household maintenance plan for the New Year if for no other reason than to avoid costly problems in the months to come.
While it is a fantastic idea to give your home an annual physical and design a strategy to keep or whip your house into shape, it’s just as important to resolve to get your home finances in order, especially if you are like my brother and have recently bought a new home. Experts recommend you spend the New Year building up your reserves and getting your financial house in order.
For example, it’s a good idea to resist the temptation to splurge. That means refraining from using a credit card to purchase those cute shoes for your 2-year-old (or yourself). It’s a good idea to have at least three months’ salary in your emergency fund–try to stay away from unnecessary spending until you reach this goal.
Another way to save a few extra dollars–think about E-payments. This payment method ensures that you never incur a late fee. As for interest rates–if they go down, think about taking out a new loan at the lower rate to replace your original loan. But, be sure to consider how much refinancing the loan will cost you. Refinancing won’t benefit you unless you plan on staying put for at least five years.
If you are considering any major repairs, remodeling or decorating projects, budget for them now. Also, take time to shop around for the best prices, and if you’re hiring a contractor, get plenty of references.
Got plans for landscaping your house in 2007? Experts say the right landscape can increase the value of your home by 15%, which allows you to recoup 100 to 200% of your investment. If you opt to have this project done, remember to keep your receipts. You may be eligible to minimize the capital gain that may come your way when you eventually sell. But keep in mind, the improvement must be one that permanently increases the value and useful life of the house.
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