Everyone makes New Year’s resolutions, but being honest, most are wishful thinking. By February, that “lose five kilos” or “learn to speak Chinese” resolution has long been forgotten for another year.
But not for you, new Waterloo Region homeowner. This year is different.
Your first year of homeownership sets the tone for the entire journey. And with just a few smart decisions, you can save money now and get more out of your investment later.
So make room on that list between “run a marathon” and “learn to cook” and make some of these easier to keep New Year’s resolutions for new – or soon to be new – Waterloo Region homeowners.
1. Start an Emergency Fund Now
Homeownership has a way of costing you more than you think. An emergency savings fund provides a financial safety net, and your new home is the perfect reason to start one.
Remember, if the boiler breaks down on a freezing cold night, there’s no landlord to call to fix the problem anymore. Car quits on you and will take a lot more than you’d like to repair? Mortgage payments are still expected on time and in full.
Without an emergency fund, these expenses could force you into more debt – or worse – before you’ve even had time to finish unpacking those moving boxes.
Ideally, financial experts say your emergency fund should cover several months of expenses, but it’s OK to start small. Set aside a portion of every paycheque with the goal of saving $1,000 as quickly as possible, and then contribute as much as you can moving forward.
2. Take Another Look at Your Homeowners Insurance Policy
Just because a standard homeowners insurance policy satisfied your lender, it doesn’t mean you’re really properly covered.
Homeowners insurance isn’t one-size-fits-all. There are unique coverage options and, more importantly, ‘exclusions’ that homeowners need to be aware of. Does your policy cover the full cost of your electronics, jewelry or other valuables? Are natural disasters like earthquakes and floods excluded?
If you are not sure don’t leave things to chance. Give your insurance broker another call and have them go through the policy with you again.
3. Get an Energy Audit
One of the things that surprises many new homeowners – especially those who have made the ‘move up’ to a house from a smaller apartment – is just how high their energy bills are. Who knew it cost this much to stay warm – or cool – and keep your computers and gadgets running.
Before you ban the A/C or start skimping on the heating in a bid to cut costs order an energy audit on your home instead.
An energy audit is an inexpensive way to get real information about your house and how well its basic systems are working. They’ll tell you which fixes will deliver the best bang for your buck and in some cases you may qualify for rebates from your energy companies and/or the government for having commissioned the audit in the first place as well.
4. Plan to Build Equity Faster
Unless you bought your new Waterloo Region home with cash, it is going to be more than a few years until you own it outright. Make plans now to build equity faster so you can unlock more benefits of homeownership even sooner.
Equity is the ‘proper term’ for “how much of your house is paid off.” Home equity is a valuable asset; accrue enough and you can use it to finance major renovations or pay off other loans
You can build equity slowly just by making your monthly mortgage payments, or you can find ways to speed up the process. For example, switch to biweekly mortgage payments to get “equity rich” even faster.