As we usher in a new year, our focus turns to making improvements and ensuring a better future. In the wake of a challenging 2023, one significant concern for consumers remains the rising cost of living, particularly in housing. Mortgage rates soared, surpassing 7%. Home prices also rose, defying the typical behaviors when higher interest rates put downward pressure on prices.
With the increase in monthly mortgage payments, saving on other expenses has reached a new level of importance.
In the spirit of being better positioned for a productive new year, here’s a look at how to trim your household expenses with insights from Houselogic.com and Consumer Reports.
Opting for DIY instead of a contractor
While professionals are essential for certain tasks, many smaller and simpler household repairs can be made by do-it-yourself (DIY) methods. For example, when the water in your toilet runs instead of automatically shutting off, the fix could be an Internet search away. How-to videos are plentiful, with easy-to-follow explanations and first-hand demos of making a repair. One video on fixing a leaky toilet explains the cause could be the fill valve or the flapper and shows how to determine which it is and how to fix either one. By doing it yourself (DIY), you could save hundreds of dollars.
Skip the extended warranty
Most major appliances come with a 90-day warranty. Purchasing with a major credit card often doubles the standard warranty, reports HouseLogic.com. Plus, most products don’t break when they are under warranty. Consumer Reports analysis confirms that products rarely break during the typical extended warranty period of two to three years.
Reconsider buying new, feature-rich appliances
While the fun new features on the latest appliances can be tempting, sticking with your functional existing appliance is more economical and environmentally friendly. If replacement is necessary, opt for energy-efficient devices labeled with the blue ENERGY STAR® symbol, endorsed by the U.S. Environmental Protection Agency (EPA).
If a new cooktop and range are in your future, consider appliances with induction technology. The heating process is significantly more efficient and faster with more precise temperature control, according to energystar.gov.
Optimize your laundry routine
Clothes-washing is a resource-intensive chore, but adopting certain practices can help you save energy and water. Consumer Reports suggests several modifications to laundry routines, including reducing the amount of laundry detergent, opting for the cold-water cycle instead of hot or warm, washing full loads rather than small loads, using high spin settings, and utilizing the dryer’s auto sensor feature instead of the timed dryer setting.
Switching your light bulbs
Switching from incandescent bulbs to light-emitting diodes (LED) is an energy-efficient and inexpensive change. Ease the expense by replacing bulbs as they burn out. LED bulbs cost more to purchase, but they can last a decade or more, so you can recover the typical bulb cost in less than six months. For an estimated $240 to change the bulbs in your house to longer-lasting LEDs, you could save $200 a year on your utility bill, according to a recent study from Reworking America and
Get rid of your storage unit
You can eliminate unnecessary storage rental by getting rid of stuff you rarely use or no longer need instead of storing it. By parting with these items, you could save $20 to $450 per month on rental costs. Optimize space within your home by finding creative storage solutions, such as utilizing under-bed storage or furniture with built-in storage.
Eliminate private mortgage insurance
If you put less than 20% down on your home, you probably have private mortgage insurance (PMI). The cost of your PMI varies, but Freddiemac.com says it costs between $30 and $150 per month for every $100,000 borrowed.
There are pathways to eliminating PMI. The Federal Homeowners Protection Act enables you to get automatic PMI termination at specific home equity milestones or request the removal of PMI when you reach 80% home equity. In fast-appreciating home markets like the Boulder and Denver metro areas, when your home value rises to a sufficient level, you will have the 80% home equity needed to request termination of your PMI.
By adopting the saving strategies listed, you can proactively cut down on household expenses and work toward a more financially beneficial start to 2024.
By Tom Kalinski. Tom is the broker/owner of RE/MAX of Boulder, the local residential real estate company he established in 1977. He was inducted into Boulder County’s Business Hall of Fame in 2016 and has a 40-year background in commercial and residential real estate. For questions, e-mail Tom at [email protected],
call 303.441.5620 or visit boulderco.com.