How to Afford Everything that Comes with Homeownership

Homeownership is the American dream, right? We spend years — sometimes decades — saving up enough money for a down payment for our first home and mark it as a major milestone in our lives.

But sorry to rain on your parade — just the down payment isn’t enough.

Sure, you’ll get the keys and have takeout on top of a box marked “front hall closet” on your first night, but then what? You need to fill it. You need to protect it. And you definitely need to be saving up for all the leaks, breaks and “oh, sugars!” that come with that property deed.

So How Much Do You Need?

If you’re starting from scratch, the interior designer rule of thumb is to spend between 10% and 50% of the home’s value on new furniture, appliances and decor. A totally empty $300,000 house might run up a $30,000 bill. It might be less if appliances are included, you’re bringing furniture with you, or you’re a good thrifter. It could cost more if you have expensive taste.

The average homeowners insurance in the US on that same $300,000 home is about $1,200 per year. It’s higher in places like Texas and Florida (hello, hurricane season) and lower out west in Utah and Idaho. Natural catastrophes, the cost of rebuilding your home and even your credit score can affect the cost of your premium.

As for emergency savings, the rule of thumb is three to six months’ worth of living expenses — definitely on the higher end, if you’re a homeowner. Realtor.com suggests 1 to 3% of your home value, so $3,000 to $9,000 stashed away for when your dog decides to eat through a wall.

It sounds like a lot. And make no mistake; it’s definitely a big part of your home-owning investment — but it’s attainable with the right knowledge and savings tools. Here are a few ways to boost your savings and lower your home-owning costs.

1. Make Your Sure Credit Score is in Tip-Top Shape

You probably remember this from when you were buying your home — the better your credit score, the better your mortgage’s interest rate. The same is true for homeowners insurance and credit card interest rates (this is important to think about if you open a store card to spread out furniture payments).

The good news? A free website called Credit Sesame makes it easy to put your credit score on track to reach your goals and keep your loan payments low. We even talked to one guy, James Cooper, of Atlanta, who used Credit Sesame to raise his credit score nearly 300 points in six months.*** He says they showed him exactly what to do — he was even able to open his first credit card.

What could adding 300 points to your score mean for your goals? It could easily save you thousands of dollars over the life of a car loan or mortgage.

Within two minutes, Credit Sesame will give you access to your credit score, any debt-carrying accounts and a handful of personalized tips to improve your score. You’ll even be able to spot any errors holding you back (one in five reports have one).

Make sure your plans don’t get sidelined by bad credit. Sign up for free (it only takes about 90 seconds) and see how much you could improve your score.

2. See if You’re Wasting $690/Year on Homeowners Insurance

You’re probably wasting money right now. And it’s probably on something you’d never expect — your homeowners insurance policy.

This isn’t something you actively think about — you just know you’re required to have it.

The problem is, you’re paying too much. Luckily, an insurance company called Policygenius makes it easy to find out how much you’re overpaying. It finds you cheaper policies and special discounts in minutes.

In fact, it saves users an average of $690 a year — or $57.50 a month. It’ll even help you break up with your old insurance company. (You’re allowed to cancel your policy at any time, and your company should issue you a refund.)

And just because you’re saving money doesn’t mean you’re skimping on coverage. Policygenius will make sure you have what you need.

Just answer a few questions about your home to see how much money you’re wasting.

3. Cut Your Other Bills to Save For More Furniture

Furnishing a house is expensive. You don’t even realize how much money you’ll need until you start pricing it all out at the store — a couch, a coffee table, a few lamps, a bookshelf, a couple side tables, an armchair or two, things to put on your bookshelf and on the wall… and that’s just in your living room!

One easy way to come up with this money is by cutting your costs and saving the difference. For example, when was the last time you checked car insurance rates?

You should shop your options every six months or so — it could save you some serious money.

A website called Insure.com makes it super easy to compare car insurance prices. All you have to do is enter your ZIP code and your age, and it’ll show you your options.

Using Insure.com, people have saved an average of $489 a year.

Yup. That could be $500 towards a dining room set just for taking a few minutes to look at your options.

4. Have a Safe Place to Save Your Emergency Fund — and Grow it 16x Faster

You’ve probably heard the best way to grow your money is to stick it in a savings account and leave it there for, well, ever. That’s bad advice when it comes to building and protecting an emergency fund.

You should be looking for a place to safely stash it away — but still earn money. Under your mattress or in a safe will get you nothing. And a typical savings account won’t do you much better. (Ahem, 0.06% is nothing these days.)

But a debit card called Aspiration lets you earn up to 16 times the average interest on the money in your account. That’s 16x more helpful when you need $9,000 earmarked for future, inevitable, home repairs.

Not too shabby!

Enter your email address here to get a free Aspiration Spend and Save account. After you confirm your email, securely link your bank account so they can start helping you get extra cash. Your money is FDIC insured and they use a military-grade encryption which is nerd talk for “this is totally safe.”

Kari Faber is a staff writer at The Penny Hoarder and a homeowner who has used these tips to save money herself. 

***Like Cooper, 60% of Credit Sesame members see an increase in their credit score; 50% see at least a 10-point increase, and 20% see at least a 50-point increase after 180 days.

Credit Sesame does not guarantee any of these results, and some may even see a decrease in their credit score. Any score improvement is the result of many factors, including paying bills on time, keeping credit balances low, avoiding unnecessary inquiries, appropriate financial planning and developing better credit habits.

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.