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The average cell phone bill runs from $40 to $140 for a family plan, but you could spend as little as $2 a month for 75 months with US Mobile if you only need basic service with no data. Utah residents pay the least for their utility costs—heat, gas, water, electric, cable, and internet—at $345 per month, according to Move.org. Hawaiians pay the most for their utilities, at $612 per month. Rent varies in a similar way based on where you live geographically. In 2022, the average monthly rent for a one-bedroom apartment in Kansas is reported at $1,169.
These grants can see your score up to $15,000 cash to put towards a new house build or first home. If you want to find out if you’re eligible, a home loan specialist can help you out with the paperwork and documents needed to access the schemes. Renters insurance is available to just about any renter, whether you’re renting an apartment in a professional apartment complex or renting a private residence. It covers you and your property from many kinds of damage and liability.
Step 1. Calculate your income
Laura Leavitt is an expert in saving, investing, insurance, loans, and mortgages. A personal finance journalist since 2016, Laura is keen to make complex topics accessible to readers with clarity and precision. Laura has also written for NextAdvisor, MoneyGeek, Personal Finance Insider, and The Financial Diet. You’ll also need to pay for utilities, likely including water, sewer, gas and electricity.
In those cases, we add restaurant trips into our food category. Maintenance costs such as landscaping, replacement light bulbs, etc. However, after I started consistently using a budget five years ago, I found that budgets really do promote freedom, not chains. Some of the links included in this article are from our advertisers. Make sure you study up on the average lifespan of your home’s features and systems, and be ready to replace them when necessary. An air conditioning unit, for example, will usually last 10 to 15 years, while things like dishwashers may need to be replaced sooner.
How much should you put down on a house?
When first-time buyers are shopping for a home, they often have unrealistically high expectations of how much they can afford to spend. One big reason for this is that they aren’t aware of all of these expenses. I can tell that I would have liked to have read a list like this before my wife and I bought our first home years ago. Your home will need maintenance over time, and if you’ve been a renter, maintenance has probably been your landlord’s responsibility.
The origination fee, underwriting fees, and application fees are all included in the final cost. Home inspections are usually not necessary to close on a home — but getting one is strongly recommended. Paying your mortgage balance , but it’s possible you’ll also be charged a prepayment penalty if you pay your loan in full before the end of your contract. Assess this amount properly with your financial institution before deciding whether to sell. However you choose to categorize them is up to you, of course; just be sure you’re including them in your monthly expenses when working with a budget. I don’t add expenses such as health care expenses in this category; we’ll talk about those in another category.
Home maintenance and repairs
Some lenders allow certain closing costs to be rolled into the mortgage loan, but it depends on the kind of loan you are getting. Many new homeowners will discover problems with their house that require upkeep. Issues with HVAC systems, electrical, and plumbing can quickly add up.
An escrow account is a neutral third-party account that holds funds for a future purpose. Many mortgage companies add your property tax to your monthly payment. Then they move those funds to an escrow account until your taxes are due. The larger your down payment, the lower your monthly mortgage payment is.
House Expenses List
Even if hiring an attorney isn’t required, it can be a great investment. At this stage, they’ll help you draw up contingencies to add to the home purchase agreement. These contingencies must be met before the home can be closed on; otherwise, you can back out and keep your earnest money. An attorney can also help with any other legal issues or questions.
However, if you add an additional payment every month of $500 from your discretionary income, you’ll cut your mortgage term in half and have your house paid off in 15 years. If you decide to list your income in its gross state, you’ll want to add an additional household expenses category that includes all of the deductions from each paycheck. Your upfront costs can vary greatly, depending on the mortgage lender you choose and how much you shop around. Be sure to compare options from several lenders to ensure that you’re getting the best deal. Factor in the estimated costs of these fees and expenses at the beginning so you can set a purchase-price budget that accurately reflects what you want—and can—spend.
For example, my monthly expense for HOA fees $30 per ($380 annually), which is on the low end and covers common area maintenance, a community pool, and a few other things. Closing costs are another expense that can vary tremendously based on your home, location, and several other variables. Generally, closing costs run from 1% to 3% of the home’s purchase price but can be significantly higher, especially when it comes to low-priced homes. Now that you have your monthly budgeting plan, the trick is to stick to it.
If you have a mortgage, your lender may set up an escrow account for estimated property taxes. Every month you’ll pay a portion of the property taxes so you’re not hit with a big bill all at once. If the loan manager doesn’t pay the sum on time, it can result in late fees. Keep a close eye on your escrow account and follow up to make sure it’s handled correctly.
Monthly health insurance costs differ dramatically depending on your age, where you live, and your lifestyle — factors like smoking and pre-existing conditions can affect the expense of your plan. You might be able to lower the average monthly cost of your utilities by foregoing cable and opting for streaming services with basic internet instead. To help you get started, we’ve assembled a list of 20 common things to include in a monthly budget, along with an average amount for each one that you can use as an initial benchmark. To avoid that fate, start building your bank account to be ready for these costs, and ensure your finances are in good shape before purchasing a home. That way, you can shop with confidence and be prepared to handle the financial responsibilities that, along with the joys, come with homeownership.
In addition, there may be HOA dues, and many buyers find they need more furniture or other upgrades. The first year of homeownership can get costly, so make a budget and stick to it. Please keep in mind third parties may use a different credit score when evaluating your creditworthiness. Also, third parties will take into consideration items other than your credit score or information found in your credit file, such as your income.
Want to make sure you’re financially prepared to be a homeowner? Bera, who opted to spend a bit more to live near friends when she recently moved to Austin, TX, counsels her financial planning clients who are buying their first homes. All too often, people don’t consider the effect of moving miles away for the perfect house. For one thing, renters often don’t pay separately for water, trash pickup, and sewer. And if your new home is larger than your previous rental, you’ll pay considerably more for electricity and gas.
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