A Financial Plan for Your Home

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Published: August 28, 2009
By: Richard Koreto
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4 People Did It

Your home is probably your biggest investment. To manage it, create a financial plan that takes into account repairs, upgrades, mortgages, insurance, and taxes.

Effort: Med 2 days
Saves: High $14,887 (mortgage interest)
Investment: Med $100/mo (extra payment)

Do you pay each home-related expense as it comes? If so, you’re missing opportunities for upgrades, or much worse, heading into a financial crisis when a slew of surprise maintenance items hit. So take a holistic look at what it costs to operate your house and set up a home financial plan.

Use our home financial plan budget worksheet, and start by writing a list of expenses, such as:

Mortgage

Taxes

Home insurance, including liability

Repairs and maintenance, such as new furnace, roof, painting

Voluntary upgrades, such as a swimming pool, a premium range, a new powder room

What will you learn from this home financial plan weekend exercise?

How much you have to spend

How much you need to allot in the short- and long-term for necessary maintenance and voluntary improvements

With this newfound grip on your home’s expenses, you can create a home financial plan that’ll help you there for years with maximum enjoyment and minimum anxiety.

Next: The mortgage: Pay it—and then some

Richard Koreto

Richard J. Koreto is a freelance writer. He’s been editor of many financial magazines and is the author of “Run It Like a Business,” a practice management book for financial planners. He and his wife own a pre-Civil War house in New York.

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