Tip#1 First time home-buyers: Saving for future repairs
Here’s a quick tip for 1st time home-buyers!
Although your home is “perfect” and ready to go when you first purchase and move into it, it’s a good idea to start putting money aside for any maintenance, repairs or improvements that must be made in the near future.
It’s recommended that one set aside 1% of the value of the home per year. For example, if your home is worth $200,000, you should save at least $2,000 per year (or about $166 per month) to use specifically for any repairs that may arise. Now this is just a rough estimate! Hopefully you had an inspection done on the property and the Seller fixed some if not all of the major repairs. This way, you can minimize the amount of money that you have to invest from the “get-go.”
This “rainy day” fund will help reduce any stress (financial or otherwise) when repairs come up. If you don’t use the money by the end of the year, you may use it to improve a part of your property, however, it would be a good idea to put it in some sort of interest bearing account so that your money is somewhat “working” for you.
Finally, if you choose to set aside the 1%….make it automatic! Set-up your account so that the money is automatically deposited into your savings each month/week.