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Episode 2400:
April Dykman highlights eight unexpected costs that caught her by surprise after purchasing her first home. From changing locks and lawn maintenance to skyrocketing property taxes and appliance repairs, these hidden expenses can add up quickly. Dykman’s advice? Save more than you think you’ll need and avoid maxing out your budget to ensure you can handle these unforeseen costs.
Read along with the original article(s) here: https://www.getrichslowly.org/8-surprise-expenses-for-new-homeowners/
Quotes to ponder:
"Cosmetic upgrades turned out to be a lot more expensive than I originally thought."
"Part of the reason we bought the house was to entertain family and friends more often (and more comfortably)."
"Luckily, my husband and I had the extra money in the bank to cover these expenses, but I can see how people can get into serious trouble if they aren't prepared."
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[00:00:00] Now before we start, you might want to check out our other podcasts covering topics like personal development and minimalism, money, health, relationships, and more. So to optimize your life in other areas, just search for Optimal Living Daily in your podcast app. Now on to the show.
[00:00:18] Hello everybody, I'm Greg Audino and this is another weekly bonus episode of ORD on which I share with you previously aired content from other shows in our network. Let's hear Diana with the post and her commentary as we optimize your life.
[00:00:36] 8 Surprise Expenses For New Homeowners by April Dykman with GetRichSlowly.org
[00:00:43] Over a year ago, I bought my first home. And while I'd been warned about the extra expenses that come with home ownership, there were still some surprises. I don't mean the unexpected costs of property taxes and repairs, expenses that are often covered in articles about new home ownership. Surprise, there's no landlord to come fix your garbage disposal. Is that really a surprise to anyone though?
[00:01:09] No, what I'm talking about are the less obvious expenses. The ones that new homeowners probably aren't thinking about when they sign the closing documents and get the keys to their new home. Here are some of those less obvious expenses that took me by surprise in the last year.
[00:01:26] Number 1. Changing the locks
[00:01:29] When I first moved in, my dad reminded me to call a locksmith and have the locks changed. Only, silly me, I had no idea that I should do that.
[00:01:38] Dad pointed out that my house had had several owners and was even a rental at one point. That means that any number of people could possibly have a key to my house.
[00:01:48] Okay, so that's three locks that needed to be changed. No big deal. Only the three estimates that I got came in at around $200. Much higher than I was expecting.
[00:01:59] Finally, I found a special for $79 and got the locks re-keyed.
[00:02:04] Number 2. Lawn Maintenance
[00:02:07] One of the biggest selling points for our house was the half-acre yard. It feels like a bit of country in the city.
[00:02:15] Well, the week we moved in, a neighbor asked us,
[00:02:18] Do you guys have a riding lawnmower? Because you're going to need one.
[00:02:21] The truth is, we hadn't really thought about lawn care yet.
[00:02:25] We'd just bought the house and we were 100% focused on some repairs and getting moved in.
[00:02:30] But our neighbor had a point. We'd either need a riding lawnmower or a lawn service. And being the DIY type, we wanted the mower.
[00:02:39] Eventually, the growing grass forced us to take the plunge.
[00:02:43] Number 3. Multiple Appliance Repairs and Replacement
[00:03:47] Upon Rolls of Painter Tape
[00:03:49] Cosmetic upgrades turned out to be a lot more expensive than I originally thought.
[00:03:54] Number 5. Furnishing the House
[00:03:57] Obviously, you don't have to go crazy furnishing every inch of your house.
[00:04:01] And we haven't. We're going slowly.
[00:04:03] But sometimes things come up.
[00:04:05] For instance, when my in-laws were planning to visit, we decided to buy a day bed for the guest bedroom.
[00:04:11] We also needed guest towels for the bathroom and a bathmat.
[00:04:15] If we hadn't had guests, we might have held off on those expenses.
[00:04:19] But part of the reason we bought the house was to entertain family and friends more often
[00:04:23] and more comfortably.
[00:04:26] Number six, window treatments and replacements.
[00:04:30] Not long after moving in, I realized just how old our windows are.
[00:04:34] As in, I'm pretty sure they're original to our 1971 house.
[00:04:39] Plus, a couple of sets of blinds had shredded strings and didn't work properly.
[00:04:43] As I discovered in the window treatment section of Lowe's, blinds are expensive.
[00:04:48] So we just replaced the two sets that weren't working.
[00:04:51] As for replacing every window in the house, it's something we're starting to look into now.
[00:04:57] Number seven, rising property taxes.
[00:05:01] Property taxes aren't a surprise.
[00:05:03] But the fact that the county increased my taxes by 31% from one year to the next was a huge shock.
[00:05:11] I'm currently protesting my taxes.
[00:05:13] And there are a couple of reasons why that assessment shouldn't stick.
[00:05:17] For one, I paid less than the assessed value for the home just over a year ago.
[00:05:22] And two, my homestead paperwork is currently being processed.
[00:05:26] And according to their site, taxes shouldn't increase on a homestead by more than 10% in a given year.
[00:05:32] Plus the value of any improvements.
[00:05:34] So, fingers crossed.
[00:05:37] And number eight, tree trimming.
[00:05:40] This is the next to-do item on my list.
[00:05:43] Another thing about that great yard that we loved is that it came with a bunch of gorgeous established oak trees.
[00:05:50] Only, it's time we had those trees trimmed.
[00:05:53] There are some branches that need to go.
[00:05:55] And the trees are entirely too tall for us to do the work ourselves.
[00:05:59] Plus, we're not arborists.
[00:06:00] And we'd like our trees to stay healthy and beautiful.
[00:06:04] After all, they're part of the reason we fell in love with this property in the first place.
[00:06:09] Covering those unexpected expenses.
[00:06:12] Luckily, my husband and I had the extra money in the bank to cover these expenses.
[00:06:16] But I can see how people get into serious trouble if they aren't prepared for some of them.
[00:06:21] And while I wish I had a magic formula to share with you,
[00:06:25] it's impossible for me to tell you how much to shore up your emergency fund.
[00:06:29] It just depends on too many factors.
[00:06:31] Like the size of your house, the size of your lawn, how much work you can do yourself,
[00:06:36] and even just plain luck or lack of it.
[00:06:39] So if you're contemplating purchasing your first home, just be aware of these hidden costs.
[00:06:45] Save more than you think you need.
[00:06:47] And don't buy as much house as you can.
[00:06:49] We bought a fairly small house.
[00:06:52] And while I love the house and I love working on it,
[00:06:54] I'm glad we didn't get anything bigger.
[00:07:01] You just listened to the post titled,
[00:07:03] 8 Surprise Expenses for New Homeowners,
[00:07:05] by April Dykeman with GetRichSlowly.org.
[00:07:10] Ah, homeownership.
[00:07:11] For many of us, owning a home is a big part of the American dream.
[00:07:15] But it can also be a nightmare for the financially unprepared.
[00:07:19] I was recently at an event where we looked at two case studies of participants
[00:07:23] to help them with their financial goals and strategies.
[00:07:27] Before too long, it became really clear that both of them bought expensive homes
[00:07:32] that have now backed them into a corner.
[00:07:35] Both of them had mortgages that were more than half their take-home pay,
[00:07:38] and their cash reserves were minimal.
[00:07:41] So they didn't have much wiggle room for the kinds of expenses mentioned in this article.
[00:07:45] I think it's worth really questioning if buying a house is right for you
[00:07:50] based on where you are in your financial journey.
[00:07:53] In my case, I bought my house as a lifestyle decision
[00:07:56] after I was debt-free and investing heavily in retirement vehicles.
[00:08:00] And while I don't look at my primary residence as an investment,
[00:08:04] I was house hacking for about two years
[00:08:06] with a roommate who covered 90% of my mortgage.
[00:08:09] And I do plan to rent this house out in the future
[00:08:12] so it will become an investment property.
[00:08:15] Home ownership has high carrying costs.
[00:08:18] And if you need to access the money you have locked up in equity in your home,
[00:08:22] you either need to sell the house or take out a home equity loan,
[00:08:26] which creates more risk.
[00:08:28] I recognize the risks of home ownership,
[00:08:31] and so really only considered it after getting other financial goals out of the way,
[00:08:36] like getting out of consumer debt,
[00:08:38] fully funding retirement vehicles,
[00:08:40] and building up a year of expenses in cash.
[00:08:44] That should do it for another edition of Optimal Finance Daily.
[00:08:48] I'll be back tomorrow as usual,
[00:08:49] so I'll see you there on the Wednesday show,
[00:08:52] where your optimal life awaits.