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If you think that the cost of owning a home ends when you make your monthly payments, think again. It just costs a heck of a lot to maintain a house. In fact, one of the biggest sticker shocks that hits new homeowners is when they realize there’s no landlord or super to fix that leaking toilet, replace that broken hot water heater or patch your driveway. This means it's important that you think about how much home maintenance work you can get free by doing it yourself. Can you repair a broken faucet? Swap out a ceiling fan? Rebuild a deck? There’s no shame in not being very handy when it comes to these types of things but if you plan on outsourcing them it's important to take this into consideration when building your budget.
What's my five-year plan?
Do you plan to have your significant other move in? Are kids in your future? Is your dream to foster rescue dogs? When you house shop it’s important to think about the life you want in the future as well as the one you now have. While it's always possible to upgrade by moving to a home with a yard or a nursery don't assume that it will be easy if your circumstances change. If 2007 taught us anything it's that when the real estate market is dead or volatile selling your home and buying a new one can be tough.
Who are my friends?
Whether you’ve thought of it this way or not your friends play a big part in how you spend your money. Are you hanging with a crowd where you feel pressured to live beyond your means? Has Sunday brunch become a stressful weekly expense? Are you taking cabs home after a night of dining out because your friends insist? Do you dress to impress? We wouldn't suggest you ditch your prosperous friends but if they’re keeping you from that dream purchase because you're having a hard time saving that 20% down payment you'll either need to learn to say, "no," or get a new posse.
While the idea of owning your home can be incredibly appealing don't rush into things until you've asked and answered these questions. If not, you could end up seeing that American dream turn into a living nightmare.