For the most part, most people are aware that you shouldn’t make any big purchases while you’re in the homebuying process. It’s advice that will likely be shared by both your real estate agent and your lender. However, a less-talked-about issue is your spending after you close. Many people are tempted to immediately fill their home with new furniture, appliances, and more. But, be careful! You could find yourself in a financial bind, especially if you’re a first-time homebuyer. Here are some tips to help you stay on track after you buy a home:
Become comfortable with your new budget
Your new house payment may take some time to get used to, and if you’re a first-time homebuyer, this is a brand new financial obligation that you shouldn’t take lightly. Take some time to become acquainted with your adjusted budget and familiarize yourself with your new financial situation. Make sure your top priority is handling your mortgage and other bills before you consider buying new home furnishings.
Make a list
Before you start buying anything, organize what you’d like to purchase into a list ordered by top priority. Put what you need most at the top and work your way down. This will help you plan for what you will need to purchase so that you can knock them out one at a time, rather than under budgeting and spending too much.
Don’t immediately jump on store promotions
It’s bound to happen—you’ll stumble across a sale, on couches perhaps, and think to yourself “Perfect! I need a new couch!” But don’t pull the trigger and immediately jump on the deal. Make sure the payments will work with your current budget and consider how these payments will compound. Adding a small $40 per month payment to your budget may not seem like much, but enough of these small payments could cause you to end up with an extra $250-per-month-financial-obligation that you hadn’t initially accounted for! In addition, keep an eye out for "x-month free financing offers." While, on the surface, they may offer a deal, pay particular attention to the ramifications if you don't pay in full by the end of the promotional period. That's usually where compounded interest will hit you—and not just for the remaining balance of what is owed on the loan, but for the original financed price. YIKES!
Take everything one step at a time after you buy your home and you should be fine. With a little patience and smart financial planning, you can eventually have a house full of appliances and furniture that you love without damaging your budget and causing unnecessary stress.
Interested in more first-time homebuyer tips? Download our free ebook, Helpful Tips for First-Time Homebuyers.