5 First-Year Homeowner Expenses to Prepare For

by Jessica Sommerfield · 3 comments

As I contemplated purchasing my first home, my friends and family reminded me of the new costs that come with homeownership. Although I confidently nodded my head that yes, I was aware of the consequences, I’m just beginning to learn exactly what they meant.

Most of us are prepared for costs like homeowner’s insurance, property taxes, and HOA dues. We can work these predictable expenses into our new housing budget as we begin to shop around and start the purchasing process. But what about the other things? Many who share their experience and advice learned the hard way that certain expenses crop up with surprising predictability the first year you own a new home. If you’re not prepared, these expenses could create a budgeting crisis, or even worse — a debt crisis.

Let’s look at 5 of these first-year homeowner expenses and how to prepare for them before and after you purchase your new home.

1. Appliance Repair or Replacement

Your prospective home’s appraisal will bring to light just about every major and minor repair you’ll need to complete within the next 10 years, whether flooring, roofing, siding, plumbing, electrical, or structural issues. If you’re purchasing from an owner and not a bank, some of the major ones might even be included in the negotiation process.

The appraisal also lists the appliances included with your home, but it won’t include much information on their age or condition, so this is something you’ll want to pay special attention to. Take careful note of how old the appliances are and how heavily they’ve been used so you’ll have a game plan for repairs or replacements. For instance, are you purchasing from a single person who didn’t use the dishwasher much or a family of five who used it daily? Here’s a list of the usual life expectancy for major appliances:

  • Washers, dryers, refrigerators, and dishwashers: 10 to 13 years
  • Gas ranges: 15 years
  • Stovetops: 15 to 18 years
  • Microwaves: 9 to 10 years
  • Water heaters: 10 to 20 years (tank-less water heaters last longer)
  • Furnaces: 15 to 20 years

2. Cosmetic Upgrades

During your first few walk-throughs, you probably started brainstorming about the fun projects you want to do, like painting and updating light fixtures or window treatments. These types of things don’t seem expensive, but they can quickly add up when you’re doing several of them at once.

Separate what you need to do from what you’d like to do (the torn window blinds versus the ugly shade of purple in the bathroom) and draw up a cost estimate so you can start preparing for these upgrades before you move in. The good news is that it’s easy to find department store and manufacturer coupons for paint and home fixtures (the best months to buy paint are June and July).

David’s Note: Don’t forget to keep the receipts on those home upgrades. You may be able to add costs used to increase home value to the cost basis of your home when you sell to reduce taxes in case you are lucky enough to owe taxes on the sale because you made a killer capital gain years down the road.

3. Additional Furnishings

You may plan to use your current furniture, but many times, you’ll need additional furniture items for your new home, especially if you’re gaining a guest bedroom or additional bathroom. Budget for this expense, as well, and look for re-sale deals on swap sites and apps like CraigsList, AptDeco, Chairish, Furnishly, Krrb, Let Go, Move Loot, or Offer Up.

4. Setting Up Services

This one is easy to take for granted, especially if you plan to keep the same services you’ve been using (at the same prices). Don’t forget that transferring services like telephone, internet, cable TV and satellite to a new location usually requires an installation and/or equipment fee. To save a little money, treat it as a new negotiation: don’t be afraid to ask about promotional deals and negotiate pricing based on the competition.

5. Re-keying All the Locks

Last, but not least, it’s always a good idea to re-key your home. Why? Unless your house is a new build, there have been multiple owners or even renters who could possess duplicate sets of keys to your house. This isn’t a major expense. Still, it could run as much as several hundred dollars depending on the number of doors and locks you have, so the expense will need to be budgeted to avoid charging up your credit card.

Handling These Expenses

Besides the previous advice, here are three more tips for preparing and handling these first-year home expenses:

  • Buy less house than you can afford to leave some wiggle room for these expenses in the housing category of your budget.
  • If time is on your side, save more than you think you’ll need for first-year expenses.
  • Prioritize these extra expenses and complete them slowly. After all, you plan on being in this house for a good long while, right?
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  • webbrowan says:

    A lot of people assume that once they’ve moved into their spanking new home that everything will be perfect and fall into place. It will surprise a lot of people that the amount of money they need to spend on regular maintenance and upkeep of their appliances and fixtures will add up at the end of the day! This article is a great reminder that we all need to manage our financing for our homes a little more carefully aside from the mortgage payments hey?

  • Ms. Frugal Asian Finance says:

    We filed our taxes early March. It was a burden off our shoulders. It was also nice to see the refund in our bank account soon after.

  • Brad - MaximizeYourMoney.com says:

    I’m surprised how many people “forget” to think past the mortgage payment amount. Home ownership is much more costly than just what is sent to the bank. This post has some great starting points for people to consider for sure.

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