Millennial Money: 3 things that change when you own a home

You signed the papers, got the keys and opened the front door. Now, that quaint little place is all yours.

But more freedom comes with more responsibility. A lot changes once you’re a homeowner. Here’s how to prepare for a few of the adjustments — emotionally and financially.

1. YOU THINK ABOUT MONEY MORE OFTEN

Ideally, you start thinking about money long before you sign the papers for your home.

Say a mortgage on your dream house would be $2,000 a month, but your current rent is $1,500. You should live at the new expense level to test it out before you buy, says Marianela Collado, CEO and senior financial advisor at Tobias Financial Advisors in Florida.

For example, you could try putting the $500 difference into savings for several months to see if you can manage.

“You give yourself time to adjust to living within the new cost of housing,” Collado says. “This way you start getting a feel for what the new budget is going to look like.”

For an even more complete picture of your new budget, go a step further. Collado recommends calling local companies before buying a house so you can gauge how much you should expect to pay for monthly bills like water and electricity.

Your money mindfulness will need to continue after you’ve settled into your house and placed a welcome mat on the porch.

A budget needs to be revisited regularly, especially since you can expect home-related expenses to go up over time. It’s crucial to have flexibility in your budget to cover an increase in utility expenses or a financial emergency.

“Financial planning is never a set it and forget it,” Collado says. “It’s so fluid. Life changes.”

2. YOU NEED THINGS YOU DIDN’T BEFORE

New homeowners will buy things they never needed before. That may include items such as a screwdriver set, claw hammer, pliers, smart thermostat and smart lighting, according to Jordan Ribelin, a Lowe’s spokesperson.

You’ll probably need a basic toolkit, water shut-off tool and plunger, too, says Danny Lipford, a national home improvement expert and host of “Today’s Homeowner” on television and radio.

These are relatively minor, but there are big expenses, too. In an apartment, you may not have needed to purchase a washer, dryer or refrigerator because they were supplied for you. And you probably didn’t need a lawn mower.

Depending on what you already own, expect to buy appliances for your new place. Start setting aside money for these items while you’re saving for a down payment and closing costs. And keep an eye out for sales and deals.

But don’t make major purchases until you move in, advises Rianka R. Dorsainvil , CFP, founder of Your Greatest Contribution , a fee-only financial planning firm. That’s because you want your debt-to-income ratio to be as low as possible at closing.

“After you purchase the home and you’ve slept in it one night, do what you want,” Dorsainvil says. “Buy the furniture. Finance it if you need to and (if) you can afford it.”

3. YOU MANAGE TIME DIFFERENTLY

Once you’ve officially moved and sent out your change of address announcements, you’ll quickly realize you’re responsible for upkeep. That means you’re on the hook when the water heater breaks or the air conditioner goes out.

It’s not just repairs, either. Lipford points out other expenses like yard work and pest control. And for maintenance, you have two options: handle things yourself or hire someone to do it.

“You really have less free time if you’re going to do items yourself,” Lipford says. “Or if you’re going to hire it done, then you have less available income.”

Managing a home is a financial balancing act, but you can view this added responsibility as a source of pride. Homeownership isn’t right for everyone, but for those who choose it, the experience is unparalleled.

“For most people, it’s just a gratifying experience when you go, ‘This is my house. This is one environment that I can truly control. I can make it bright. I can make it dark. I can make it cold. I can make it hot.’ You can’t do that everywhere you go in every aspect of your life. So from that standpoint, there’s nothing like it,” Lipford says.

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