Inflation. The rising cost of our weekly grocery trip, filling up at the gas pump, and summer travel plans: everything is more expensive. For buyers in the real estate market, inflation is a concern as mortgage interest rates and home prices continue to climb.
Even though it is a seller’s market, existing homeowners are affected by inflation. One of the advantages of owning a home is locking in a mortgage amount for the life of your loan, however, the cost of maintaining a home can certainly fluctuate.
Whether you are a new homeowner, hope to be one soon, or have been a homeowner for many years, here are 3 ways you can offset inflation and the cost of homeownership.
Number 1: Reassess Your Home Insurance
I recently had a client call me in a bit of a frenzy—she received a notice that her mortgage was going up by $200 a month. What was happening?! When taking a closer look, we realized that it wasn’t her mortgage that was increasing, but her homeowners insurance.
If you’re a current homeowner, then you’ve probably received a similar notice before—an annual escrow account disclosure. If you have a shortage or surplus in your escrow account (the account that pays your property taxes and homeowners insurance), then your mortgage company will calculate your new payment amount for the following year. If you have a surplus, you’ll receive a refund check in the mail and if you have a shortage, then you typically have the option to pay the shortage in full or break it down monthly.
With changing wildfire risk zones and the rising cost of building materials, don’t be surprised if you receive a similar notice letting you know that your homeowners hazard insurance is increasing. For my client, the increase was just not feasible with her current budget. She called her insurance company and was able to significantly decrease her premium by bundling her auto and RV insurance with her home and increasing her deductible.
Checking in with your insurance agent regularly is a good idea. Asking for discounts, reporting updates to your mileage, and reconsidering your deductible are all ways you can reduce costs while still protecting your assets with the right amount of insurance. And remember—getting a quote is free!
Number 2: Stay on Top of Home Maintenance
One of the biggest costs of homeownership can be repairs to your home, replacing appliances, updating landscaping, and maintaining the structural integrity. To prevent future large bills, now is the time to get into a home maintenance routine if you don’t have one already. Think of it like changing the oil in your car—would you rather invest time and money on an oil change every few months or on a new engine?
If you can afford to outsource some maintenance – weekly lawn mowing, sprinkler repairs, tree trimming or gutter cleaning – then that’s great. Much of home maintenance can be accomplished yourself. If your weekly lawn maintenance is costing you $80 per week, but you can buy a lawn mower from Lowe’s for $100 then you will be in the green (no pun intended) within the first month. Plus, count that lawn mowing as a workout and you can feel even more productive!
One of the key features of your home to make sure you stay on top of is the HVAC system. Make sure to change your filters regularly to keep your system running smoothly. For appliances, make sure to check your filters as well, clean out dryer vents, and run the cleaning cycle on your washing machine.
If you have a pool, then you can take a sample of your water to your local pool supply store for a report and tips for maintaining your pool’s chemistry. These are just some ideas—here’s a great resource calendar for staying on top of your home maintenance. (where is the calendar)
Number 3: Take Advantage of Utility Savings Programs
Many utilities such as SoCal Edison and SoCalGas have programs in place to save homeowners money during the summer and year-round. You may have to meet certain criteria to qualify, but if you do, these programs can be a great way to save some money.
Edison’s Energy Savings Assistance program helps qualified customers receive energy-efficient appliances at no charge or a minimal charge. The company also has programs in place to lower energy bills, including their Summer Discount Plan, Smart Energy Program, CARE and FERA programs, and one-time bill assistance.
SoCalGas also has a number of rebates and programs available to help you cut costs. One popular program is the Residential Advanced Clean Energy program which offers a complimentary walkthrough energy assessment and the installation of energy technologies to help make customers’ homes more comfortable and help conserve energy, which could lead to lower utility bills.
We are all feeling the pinch and looking for ways to stretch every dollar. I hope these tips can help save you some cash. What are some other ways you are offsetting inflation at home? I’d love to hear them!