Real Estate

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There's No Place Like Home For Savings

There’s no place like home to save on the cost of living. Home is, after all, where many cost of living expenses have risen. While incomes have risen only 30% to 35% since 1996, some home-related costs are up by more than 80%. Here’s how not to be stretched thin while preparing yourself for your next home purchase:

Arizona Maintains Rank As Second-Fastest Growing State

Arizona held its position in 2008 as the second-fastest growing state in the country. From July 1, 2007 to July 1, 2008, Arizona population grew by 2.3%, or about 147,000 people, according to the U.S. Census Bureau. The year before, Arizona also was the second-fastest growing state, but at a higher rate of 2.8%.

Utah’s population grew 2.5% from 2007-2008, taking over the top spot on the list from Nevada. After Arizona, Texas, North Carolina and Colorado rounded out the top five, each increasing by 2%.

Texas was the biggest numerical gainer, adding 484,000 people between 2007 and 2008 followed by California with 379,000; North Carolina with 181,000; Georgia with 162,000; and Arizona with 147,000.

Source: Phoenix Business Journal

Create or update your household budget and balance it. Account for every penny you earn, save and spend to reveal your spending habits. Your spending habits will show you where to cut back.

Downsize. The average monthly mortgage payment rose 46% since 1996. Don’t wait to be an empty-nester to fund your retirement. Cash in on a smaller home now. Factor in selling costs, the potential for a capital gains tax hit and higher property taxes. The upside to down-sizing is that with enough long term equity, a smaller home could be mortgage free.

Sell, simplify and organize. Sell all the stuff that won’t fit into a smaller home or stuff you’ll never use. An organized home is a time-saving home and a time-saving home translates to a money-saving home.

Shop around for homeowners insurance. Insurance premiums rose 83% between 1996 and 2006, but rates still vary. Comparison shop among various companies or use an Independent Insurance Agent to help you get the best deals.

Raise your homeowners insurance deductibles. Save more money through discounts for home fire safety and security systems, for buying multiple policies (auto, life, health, etc.) from one company, and for avoiding unnecessary claims.

Appeal your property tax assessment. In most jurisdictions, taxes are assessed based on a home’s price. In areas where home prices have tanked, you could get a tax break. See your assessor or other tax collector for the appeal process for your jurisdiction. Be prepared to prove the value of your home with an appraisal or comparative market analysis of recently sold properties.

Green up. The cost of energy rose 43% from 1996 to 2006, and even more since then. Your home abounds with energy saving possibilities. Check with your local utility and state energy agencies for energy saving tips.

Get help. Don’t hesitate to reach out for financial help. Always contact creditors at the first sign of trouble. You may be eligible for mortgage modification, special refinance loans or other assistance that can reduce your monthly mortgage payments.

Don’t squander your savings. Bank some money for a down payment and pad (or start) an emergency slush fund. Also, use your savings to pay down your credit card debt.