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The average California homeowner spends more than $2,399 a month on general homeownership costs, not including mortgage payments, according to a new study. Photo courtesy Getty Images.
When purchasing a home, it’s a no-brainer to consider how much money to set aside for a down payment and monthly mortgage costs. But what about other expenses that can eat away at your budget?
Don’t forget to consider future utility bills, debt payments (auto loans, student loans, minimum credit card payments) and home maintenance and repair costs.
Purchasing a home in California is expensive, but so is owning one. According to a new study from Bankrate that shows how much homeowners in all 50 states pay for home maintenance, the average California homeowner pays about $2,399 in homeownership costs, according to the study. This includes property taxes, homeowner insurance, cable and internet and annual energy bills. This does not include mortgage payments.
This amount represents a 32% increase from 2020 due to higher home values, the after-effects of pandemic-driven inflation and rising insurance premiums, according to the report.
The median single-family sale price in California was $848,300 in March, which means maintenance costs of $16,966 a year. Homeowners in California also pay average annual property taxes of $6,832, average annual homeowners insurance of $1,572, average annual cable and internet costs of $1,434 and average annual energy bills of $1,986. The total annual tab for the average Californian: $28,790, the report states.
By comparison, average maintenance costs for a typical single-family home nationwide are $18,118 annually. (To estimate the average home maintenance price for each state, Bankrate calculated 2% of the home’s value. The upkeep costs were adjusted for inflation.)
In addition to these costs, first-time homebuyers, in particular, should consider their lifestyle when budgeting home expenses, Eileen Giorgi, president of the Silicon Valley Association of Realtors, said. They should ask themselves: “Will there be some wiggle room in our budget to continue enjoying the things we like to do?”
“Many buyers are so excited about their home purchase that they don’t consider that there are hidden costs of buying a home,” Giorgi said. “In any home purchase, whether the home is old or new, there will be some unexpected expenses that may force buyers to adjust their budget and prioritize what’s important to them, especially when it comes to being able to enjoy life in their new home.”
Before making a down payment on a home, here are some things buyers should consider when determining their overall budget and lifestyle needs.
Travel
Travel is an important to many people. Consider how much money you would need to spend on a yearly vacation or short weekend getaways.
Landscaping
If you purchase a home with a large lawn that needs upkeep or new landscape, plan on setting aside money for lawn maintenance, in case you have to hire a gardener or professional landscaper and what may be a higher-than-you’re-used-to water bill.
Hobbies
Some people believe hobbies are a waste of time and money, but hobbies are good for your mental and emotional well-being. Organize and prioritize your hobbies. Whatever you choose, make sure you benefits you and is not detrimental to your financial goals.
Family Needs
If you have children, remember to factor in costs for daycare and extracurricular activities, such as soccer, gymnastics, baseball or piano lessons fees.
Entertainment
Dining out, watching movies, going to concerts, shows and other events, are some of life’s pleasures. Balance what you spend on entertainment and your financial obligations in such a way that won’t leave you feeling dissatisfied with life.
Retirement
Saving for retirement as early as possible can ensure that you have enough money to enjoy a comfortable standard of living when you decide to stop working or when you decide reduce your work hours.
Emergency Fund
An emergency fund can help tremendously in case you experience an unexpected financial setback. The size of your emergency fund will vary depending on your lifestyle, income and monthly expenses. The rule of thumb is to save at least three to six months’ worth of expenses.
“It is important, especially for first-time buyers, to consider their lifestyle preferences, as well as their job and financial situation before buying a home,” Giorgi said. “Study your finances and see where you can cut expenses, but make sure you can still afford to lead a comfortable lifestyle in your new home.”
Silicon Valley Association of Realtors (SILVAR) is a professional trade organization representing 5,000 Realtors and affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.
The term Realtor is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of Realtors and who subscribes to its strict Code of Ethics.
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This article was originally published by a www.paloaltoonline.com . Read the Original article here. .