Successfully buying a home, especially as a first-home buyer is a significant milestone worth celebrating.  

Often the culmination of hard work, planning, and financial commitment, it can be tempting to think that once settlement is final, it’s all smooth sailing ahead. 

However, it’s important to remember that the responsibilities associated with homeownership extend beyond the initial purchase. It requires consideration of ongoing expenses, maintenance costs and other financial and lifestyle factors.

Remaining diligent about your household finances post-settlement and continuing to manage these effectively is essential to ensuring long-term financial stability, the easy enjoyment of your home and your everyday life in general. 

In this guide, we will explore some strategies and best practices that can help you successfully manage your household finances post-settlement.

 

The Importance Of Financial Management For Your Household

As we’ve mentioned before, learning how to manage your personal finances ahead of buying a home is key to your success as a homeowner. 

But this isn’t a quick sprint and settlement is not the finish line. 

Taking on a mortgage is a serious financial commitment. With most banks and lenders offering a 30-year term within which to repay the loan, ongoing adherence to healthy financial habits is required. 

Failure to do so can have serious consequences, seeing you unable to fulfil your financial obligations, including tax payments, mortgage repayments, insurance premiums, and utility bills among others. 

In addition to this, it can create significant stress and anxiety. Negatively impacting your relationships, lifestyle, approach to work and more. 

Buying a home should enrich your life, not consume it due to mortgage stress. The last thing you want is to achieve this goal and then end up in a position where affording a simple coffee with friends is a stretch.

This is why managing finances remains important long after you’ve moved in. 

 

Tips For Managing Household Finances Following Settlement

Whether you’re a homeowner who is managing finances as a couple or as an individual, implementing the below tips is highly recommended.  

Make A New Budget

Establishing a comprehensive home budget following settlement is paramount to maintaining healthy household finances. 

Start by compiling a list of all the new monthly expenses you will now need to account for as a homeowner.

This will include things such as mortgage payments, council rates, homeowners insurance, utilities, maintenance costs, and any strata fees or similar. We advise incorporating a margin for increased mortgage repayments as this can help you accommodate interest fluctuations.  

Include other household and lifestyle expenses such as groceries, transportation, healthcare, school or daycare fees, entertainment, gifts, extra-curricular activities, gym memberships, streaming services and more. It is important not to leave anything out. 

Once done, compare your total expenses against your household income to determine whether your budget is realistic and sustainable. 

Depending on the outcome of this, you may make some adjustments or sacrifices to reduce non-essential spending and ensure you can meet your financial obligations. 

Don’t forget to regularly review and update your household budget to incorporate changes in income or expenses and to reflect new financial goals.

Create An Emergency Fund

Owning a home frequently comes with a variety of unexpected expenses. From minor repairs such as a leaky tap to major problems such as termites or failed waterproofing, preparing an emergency fund is essential. 

A robust emergency fund supports better financial stability and provides peace of mind against expensive emergencies that could potentially jeopardise your homeownership.

As insurance is not always able to be used in these instances, you should make provisions for covering these unforeseen costs by including regular contributions in your budget. 

You should aim to set aside three to six months’ worth of living expenses in a dedicated savings account or offset account to serve as a financial safety net.

As much as possible, avoid dipping into your emergency fund for non-essential expenses, and replenish any funds used for emergencies as soon as possible. 

Monitor Your Mortgage Payments

Mortgage payments are typically the largest expense associated with homeownership, so it’s crucial to manage them effectively. 

Most mortgage holders will experience fluctuations in their repayments across the term of the loan due to changes in interest rates. Even if you have a fixed rate initially, this is unlikely to extend beyond 5 years. 

As a result, it is important to remain aware of what interest rate is being applied or when a fixed rate is ending as this can greatly impact how much you need to pay each month. 

Where you are facing continued payment increases, it can be beneficial to look into refinancing with a lender that offers more competitive terms. 

Wherever possible, it is encouraged to make additional principal payments monthly as this can help you to pay off your mortgage faster while also saving you money on interest over the life of the loan. 

Keep On Top Of Home Maintenance & Repairs

As part of your household budget, you should account for ongoing repairs and maintenance. 

Keeping on top of maintenance and having the financial capacity to swiftly resolve repair issues that arise, is vital to the continued enjoyment of your home and to upholding its value. 

Through regular maintenance, you can help to prevent damage or deterioration to your home that can attract costly repairs while also prolonging the lifespan of your home’s systems and components. 

 

Find A Home That Complements Your Finances & Goals With Stop Renting Perth

We believe that with proactive financial management and a commitment to financial stability, homeowners can enjoy the benefits of owning their own home while also safeguarding their financial future.

However, the property market is increasingly difficult to enter with many aspiring buyers feeling the pressure to push their borrowing power to its limit to afford a home. 

Add to this the difficulties of rate rises and keeping on top of household finances long-term following settlement becomes much harder.

How We Can Help

At Stop Renting Perth, we offer an alternative pathway to homeownership through our competitively priced home and land packages. Helping you to escape the cycle of renting sooner. 

Providing an opportunity to move into a brand-new home of your own, often with a reduced level of financial commitment when compared to buying an established property, we help your finances go further. 

Able to combine government grants such as the first-home buyers grant or building grant where eligible, we also offer assistance to those who do not have a deposit or savings set aside. 

With over 70 home designs to choose from and land available in locations all over Perth, we offer exceptional value, genuine guidance and a proven roadmap for financial success in your journey to home ownership and beyond. 

To learn more or to book your obligation-free consultation book your call today.