Keep a Cash Stash for Moving Into a New Home
It is amazing getting a new house! But after scraping together a down payment, there are bound to be other costs. While saving for your house, giving yourself a cash stash for these incidentals (and sometimes not so incidental) will help the transition go smoother and hopefully, you won’t feel like bleeding money.
Of course, you have to get your stuff there. Whether you use movers or do it yourself, there will be some cost, so set aside funds for that. See Katherine’s Money Saving Moving Tips article.
The next expenses seem to fall into three categories. Make it nice, make it your own and make your head explode.
Make it nice
These costs are the cleaning products or professional cleaner you hire. Everything from new shower curtains to new trash cans. Pillows and mattresses—everything to make your home functional. A towel rack, hooks in the bathroom and new towels to put on the towel rack or hooks in the bathroom!
This tends to be the most surprising because you never realize how many items we use and need on a regular basis! It is also the most frustrating because they are mostly small dollar amounts that just add up. The best way to combat this is to first, use what you have. That old kitchen trash can that doesn’t exactly fit in the perfect spot will work just fine for a while longer. Secondly, since there will be items you have to buy, give yourself a cash stash that you know is okay to pull from for these items. The objective is to prioritize a limited pool of dollars.
Make it your own
These costs are the painting the walls, new furniture or fixtures or even doing some modest renovation.
These are important to do because you want to make it feel like a home to you. We would consider these short-term goals where you can sum up estimates for each item or project and plot them out. Specific renovations may vary depending on the house you get, but as you save for a house, also earmark some funds for projects or large furniture pieces.
Make your head explode
I think I’m being more realistic than pessimistic when I say that something will go wrong. Something that your home inspector or real estate agent didn’t see and no one could have foretold, and it will cost you money. Need to replace the circuit breaker main panel? The antiquated wall heater finally gave up the day you moved in?
That’s what your emergency fund is for. For appliances and systems, a home warranty could help ease the expense of repair or replacement. See my article Is A Home Warranty Plan Worth it?. For everything else, keep your emergency fund topped off.
These three pools of cash are meant to be saved and held in addition to your down payment, so be sure to keep them separate! The goal is to prepare for these inevitable expenses and make moving into your new home less stressful!
How did I do? I estimated $5,000 for the ‘make it nice’ items and I definitely underestimated it. Sheets and blankets for four bedrooms add up! This is the one area where I felt like I was constantly paying off my credit card for tiny items. For the ‘make it mine’, I’m on track and still have funds for the interior painting and a few more pieces of furniture. I plan to tackle the recommended fixes from the home inspection report over the next year or so. For the ‘make my head explode’ issues, the first item was the dryer. Thankfully I got the home warranty plan. There is a 10-day delay while they scour the earth for a replacement part before they replace it, though. The next item was the wall heater expiring during a California winter (chilly, but no snow). I had planned to replace it with mini-splits anyway and researched the costs, so had funds set aside for that, too.