At some point you may be a first-time homeowner.  While a house is typically the largest asset a family owns, remember that it is also your home and place of refuge from the world.  Consider everyone who lives in your home and everyone you visit with there.  The home is where the majority of family memories are made.  Protect it.

Plan and Budget

Sit down as a couple or family around the kitchen table and make a plan on how you wish your home will look and function.  Putting these wishes in writing is key; written goals have a much better opportunity to become real and tangible.  Plus, after you have a written plan you will find small things to change that are both economically feasible and high value for your happiness, i.e. Painting a room or two, putting in a newer thermostat, changing out some of the carpet or getting a rug to spruce up a room, buying a new microwave, do-it-yourself light landscaping, etc.

These days, it’s much easier to upgrade your home on a budget because of websites like Pinterest and the DIY Network.  Sharing and exploring home remodeling ideas and tips is one way people are saving money and keeping costs lower.  Not only will upgrading your home DIY-style save you money, but you will feel pride in the fact that you did it yourself.  When friends come over and see that awesome new chevron accent wall, how much better would it be to say you did it yourself versus hiring someone to do so?

Pay Off the PMI

Read through your mortgage documents and get a good understanding of your PMI responsibilities.  Many lenders require Private Mortgage Insurance until your loan balance is 80% of the value of your home or 5 years whichever comes later.  One of your priorities should be to remove PMI as soon as possible.  This means paying off your mortgage a little faster than your mortgage payments require.  There are several ways to accomplish this.

Can you pay $100 extra per month on your mortgage?  Find a mortgage calculator online and try paying a little more and see what happens to the principal on your loan.  It can be significant.

Another way to do this is to set up biweekly payments on your mortgage.  Many banks will set this up for free and it takes advantage of the fact that there are 52 weeks in a year and in effect this technique allows you to pay an extra mortgage payment annually.

Take a look at your 401k contributions if you are looking for extra dollars to make this happen.  Most people should invest in their retirement at least up to what their employer matches to take advantageous of the full benefit.  But if you are responsibly planning for your retirement you may be contributing over and above this amount.  If you are this person, it might make sense to lower your contributions to the match in the short term to pay down your mortgage fast enough to relieve yourself of the PMI monthly expense.  You can up the 401K contributions considerably once the PMI comes off.

Consider Life Insurance

Do you have life insurance?  Term life insurance provides income replacement in the case of premature death of a provider.  For most people life insurance is very inexpensive and protects your family’s standard of living.  Not having the means to keep your home after a family tragedy would add unneeded stress to not only your spouse, but your children as well.

We generally recommend at least 10 times your income plus any large debts such as your mortgage.  Remember to get life insurance on both adults in your household if there are two of you.  Even if one of you makes significantly more income than the other, it takes two to run your family.  If you are a single parent think through whom you want as guardian and, again, buy enough coverage that allows them to continue raising your family if you die prematurely.

We manage risk with our car and home through insurance by law or requirements.  Life insurance is a personal responsibility and typically costs less than our auto or homeowners insurance.  Find out how little it would cost you to financially protect your family and home by running a term life insurance quote now.


Photo credit to: U.S. Army


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