While homeownership undeniably comes with plenty of expenses, there’s no reason to spend more than you have to. If your home seems more like a money pit than an asset, it could be that you are making one of the common money mistakes.
By Michelle Ullman
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.
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. What might have been an inexpensive fix in the beginning could cost you hundreds or even thousands of dollars in repair costs.
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 up front, they ultimately save you big through longer life and superior efficiency.
Hanging On to Inefficient Appliances
Are you still using a dishwasher, washing machine, clothes dryer, or refrigerator from the last century? If so, you’re passing up the considerable energy savings to be found with today’s high-efficiency major appliances.
Paying for Services You Don’t Need
Hiring out services such as pool or yard maintenance, housecleaning, 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.
Not buying enough insurance coverage
Having the right insurance — including medical, automobile, homeowners, long-term care, life and disability — is key to good financial planning. While it can be difficult to figure out the kinds of insurance and the amount of coverage you may need, not having the right balance of insurance can be disastrous if you’re hit with an unexpected expense.
It’s a good idea to review your insurance coverage each year and determine which policies you may or may not need based on any major life events you’ve experienced. For example, if you’ve purchased a newer, more expensive car, it’s time to reevaluate your auto insurance. If you’ve recently gotten married or added a baby to your household, it may be time to take a look at your health insurance. If you’ve completed a major, value-adding home remodel, it’s probably a good idea to increase your homeowner’s insurance. It’s not enough to have just any old insurance coverage in place; you need to make sure the insurance you’ve bought will cover the full value of your growing assets.
Lacking an investment strategy, or not sticking to one
If you invest in stocks or mutual funds as part of your savings plan, it’s important to have a strategy for that money. Too many people let their emotions get in the way and end up buying or selling on impulse. Another common misstep is spending too much time and effort trying to time the market, hunting for the “big payoff” or chasing the investment of the month (or week or day). Instead, you need to decide on a strategy and stick to your plan.
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.
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.
