Queen of free: Making a house a (thrifty) home

Oft called the “American Dream,” owning a home of your own can be a dream come true. At the same time, moving into your first home brings with it expenses even the thriftiest and most intentional budgeter never see coming.

First-time home owners (and even those who haven’t moved in a while), need to calculate the costs before signing the dotted line. These sneaky extras that might add more dollars to the final price of their new abode.

Closing costs

Inspections, title fees, service fees and more are rolled into the lump term of “closing costs.” It’s easy to overlook this potentially pricey category of expense. When you determine your budget to purchase a new home, you’ll need to consider how closing costs might impact your overall offers. Typically, you can expect to spend 2 to 5 percent of your home’s purchase price in closing costs. If you want to estimate how much these fees will set you back, you can find a closing cost calculator with a quick Internet search or simply ask your realtor up front.

Cleaning costs

Moving in or out of a home requires more than a routine dusting. Consider how much cleaning your new home might cost. This unanticipated expenses range from big projects such as duct cleaning (recommended if you have allergies and the previous owners had pets) to small supplies such as floor cleaner or shelf liner. To save more money, you should opt to do the majority of cleaning yourself. Enlist your excited friends and family to lend a hand. But for bigger, more complicated projects, you may need to spend a bit more and hire the job out.

Decor and furniture

Consider welcome mats, new couches, throw pillows, potted plants or storage units. You may not have everything you need for your new space. Will you paint the walls or install new carpet? Do you need a mirror to hang above the fireplace? A bed for the guest room? Your overall budget should include designated dollars for the price of customization, making your home your own.

Insurance

Most renter’s insurance ranks relatively low in financial impact. However, you may find your new homeowner’s policy packs a punch. Plus, many new homeowners will also face the added expense of private mortgage insurance. Find a local, independent insurance agent to help you shop out the best policies to meet your needs. If you don’t have an insurance agent or feel like you need to make a shift, use your social media networks to inquire who your friends would recommend.

Taxes

Sure they might not be due up front, but you will need to pay taxes on your home. Your taxes will more than likely be rolled into your mortgage payment. Each month, a portion of your escrow helps you “save” money to put toward the twice-yearly expense. Home owners building new construction should be mindful they could see a significant tax increase in year two or three after moving into a new home. Build enough margin into your budget to easily manage such fluctuations.

Utilities

Moving into a new home makes your monthly utility budget tricky. It’s difficult to know exactly how much you’ll spend on water, lights or heat until you’ve lived in your home for about a year. If you can, inquire of the previous owner how much they average on a monthly basis for these necessities.Purchasing and moving into a new home is an incredibly exciting season of life. Don’t let your blind enthusiasm tank your finances before the moving truck even pulls out of your new driveway. Be an expense detective and determine how much you’ll need to spend to make a house a home.

Greenwood resident Cherie Lowe and her husband paid off $127,000 in debt in four years and now live debt-free every day with their two kids. She is the author of “Slaying the Debt Dragon: How One Family Conquered Their Money Monster and Found an Inspired Happily Ever After.” Send questions, column ideas and comments to newstips@dailyjournal.net