It’s a well-known fact that the first months, even years, as a new homeowner can be hard on the budget: moving costs, welcome tax, renovations, high upfront mortgage fees, etc.
Unfortunately, the expenses don’t stop at the final signing before the notary! So, what strategies can you apply to keep your finances in good order during this period?
Shop Around for Your Insurance (and Negotiate)
Home insurance premiums can vary significantly from one insurer to another. Contact several companies for the best deals. If one quotes you a better price, tell your current insurer: they will no doubt lower your rate to keep you as a client. Repeat this exercise every time your policy comes up for renewal… or before if you find an unbeatable offer.
DIY Small Repairs
Or put your trust in a handy relative! They’ll certainly charge you less than a certified contractor. A word of warning, though. Only do this for projects that don’t call for specialized expertise! Similarly, moving into a new dwelling often involves painting. Again, this is a task you can carry out on your own! Doing yourself whatever work doesn’t require hiring a professional will save you labour costs.
Put Off Larger Renos… if You can!
While you may be tempted to undertake large-scale renovations upon moving in, try to avoid this in the first years following your home purchase (unless they’re absolutely necessary). Big expensive projects (recovering the roof, for example) can probably wait. Moreover, in the case of a recently built house, contact your municipality to learn the set deadline for laying sod or erecting a fence. Extend this period as much as you can! The same goes for redecorating and new furniture. There’s no rush!
Improve Your Home’s Energy Efficiency
Investing in energy-efficient appliances, adding insulation and installing smart thermostats can considerably reduce your power bills. Furthermore, if the property is old and poorly insulated, consider applying weatherstripping products around the windows and patio doors to improve the overall insulation.
Refinance Your Mortgage (Already!)
The interest rate on your mortgage may be very high, in line with the prevailing rate at the time you purchased your property. In the event of a major drop in interest rates, breaking your mortgage before it comes to term may be to your advantage. This could reduce your monthly payments and save you thousands of dollars over the life of the loan.
Grow Your Own
You finally have a house with a yard! Plant a vegetable garden that very first spring whether you’ve started the rest of the landscaping or not. Cultivate the vegetables you regularly eat as well as herbs. Growing your own is very economical, you’ll see! Additionally, gardening is a pleasant activity that will enhance your quality of life.
Take Advantage of Grants and Tax Credits
Research what government tax credits and incentives are available for homeowners. Some municipalities offer financial assistance as well! First-time homebuyers may equally make a tax-free withdrawal from their RRSP under the HBP program. This amount can serve as a useful nest egg to help you get through those first years following your home purchase.
Rent Out Spare Space
Do you live in a neighbourhood with a lack of parking? Do you have a large shed lying empty? Is your residence close to a university and your basement could be converted into a student apartment? These are all great—and temporary—ways to bring in a little extra cash!
Reducing costs following a new home purchase certainly takes a bit of work and planning, but it’s undoubtedly worth the effort! Don’t forget that every penny counts!