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The 12 Worst Money Mistakes Ever Made by Homeowners

While owning a home comes with a lot of costs, there's no reason to spend more than you need to. If your property appears to be more of a money pit than an asset, you may be making one of these 12 common money mistakes.

Not Taking Care of the Small Stuff While It’s Still Small

Putting off home repairs is a very common—and very risky—mistake. That slow leak or cracked fixture might seem like a minor inconvenience that has little bearing on your daily life but left unattended, that damage could escalate into an emergency situation.

Paying for Services You Don’t Need

Hiring out services such as pool or yard maintenance, house cleaning, small repairs, or minor home remodeling projects does save you time, but it costs money that might have been better spent (or saved) elsewhere in your budget. Instead of engaging a professional, have your teenage son or daughter handle pool or yard care, and consider tackling small DIY and maintenance tasks yourself.

Buying Extended Warranties

If you’re buying a new major home appliance, the salesperson will probably pressure you to purchase an extended warranty. Although this may sound like a money-wise choice, the truth is that many consumer advocates advise against them. The exclusions and fine-print rejections in an extended warranty can be lengthy, and chances are, if your appliance does need to be serviced, it will be covered under the manufacturer’s warranty. Review your manufacturer’s warranty first to help you decide if you need the extra coverage.

Using Old-School Light Bulbs

If you’re still holding on to your incandescent light bulbs, it’s time to let them go. While CFL and LED bulbs might cost more upfront, they ultimately save you big through longer life and superior efficiency.

Doing Unnecessary Improvements

Before hiring a contractor to dig that swimming pool or add a new home office, think long and hard about how much you really need that expensive addition, and how much it will cost to maintain after the initial investment. After crunching the numbers, many homeowners find that the actual cost of a home improvement far exceeds their initial expectations.

Neglecting to Save for Emergencies

Nobody can foresee when household emergencies will strike—whether it’s a hole in the roof, a rusted-out water heater, or a doomed central heating system. But these malfunctions are all part of homeownership and it’s best to be prepared when they do occur. If you don’t set aside a portion of your savings for these types of home emergencies, you’ll end up having to pay for repairs on credit and get hit with a double whammy: the cost of the repair and the interest on your credit card.

Paying for Storage Pods or Self-Storage

As a general rule, if you are paying to store your possessions in a pod or storage unit, you are wasting money. Unless you have a firm plan for using your stored items—say, a canoe for this summer’s family vacation, or an artificial tree for Christmas—assume that you’re never going to drag them out. Sell or donate your excess possessions, close your storage account, and save money.

Setting the Water Heater Too High

If your water heater is set above 120 degrees, your utility bills are too high. The U.S. Department of Energy recommends a water heater setting of 120 degrees to save money, reduce wasted energy, and lower the risk of scalding your skin.

Not Changing Air-Conditioning Filters

If you rarely—or even worse, never—change the filters in your HVAC system, you’re lowering its efficiency while raising your energy costs. To keep your air clean and your energy bills low, change your filters seasonally. Switch them out more often if you live in an especially dusty area, smoke, have pets, or suffer from allergies.

Planting High-Maintenance Landscaping

While every home’s curb appeal can benefit from attractive landscaping, it’s best to pass up on extravagant or delicate plantings that will require a professional’s expensive care. Instead, choose hardy greenery that will thrive with minimal maintenance, and liven up the yard with attractive and affordable annuals planted in pots and window boxes.

Not Comparing Insurance Quotes

If you went with the insurance company your real estate agent recommended when you bought your home, or if you automatically signed up with the same company that provides your auto insurance, you may be paying too much. Shopping around can save you a considerable amount on your insurance premiums.

Smart Savings

Sometimes in order to save money around the house, you have to invest a little into it first. While your instinct might be to cut corners on repairs or to choose cheaper products, there are instances when spending more will save you on costs in the long run.

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