Five Metrics to Managing Home Finances

MANAGING HOME FINANCES Make better decisions about your home and manage where your money goes into your largest asset by tracking five key different financial metrics. HOUSE VALUES Different values for your home serve different purposes. TAW Purchase Price Assessed Value Appraised Value Insured Value The price you and the seller agreed to when you bought the calculate your home The value that your local county uses to Your homeowner A third party report that a bank uses especially when you are refinancing insurance policy value for re-building if necessary property taxes The Current Value of your home is based on many factors and fluctuates over time. Market conditions, location, the condition of the house, the desirability of the home and countless other factors are involved HOUSE RELATED MONTHLY EXPENSES Below are some high level rules of thumb as a percent of income. Property Expenses Utility Costs Lower 30% 10% Mortgage, Tax, Insurance Electric, Gas, Water, Garbage Basic Services Premium Services Higher Monthly household expenses vary greatly depending on where you live, and the size of home you have. 4% 2-6% Internet, TV, Phone, Security Cleaning, Landscaping, Pool, Pest Control IMPORTANT Pay attention to which expenses are fixed versus variable based on usage, like the electric bill. MAINTENANCE AND REPAIR COSTS Remembering to do regular maintenance to keep things working longer and reduce fix and replacement costs EQUIPMENT MATERIALS AC, Water Heater, Furnace, Fans, etc. Fixtures, Roof, Floors, Windows, Siding, etc. Fix or Replace? APPLIANCES LANDSCAPING Refrigerator, Stove, Dishwasher, Washer, Trees, Walkways, Lights, Mulch, Plants, Fix or Replace? As a rule of thumb, your annual maintenance and repair cost is between 1% and 4% of your home value, depending on the age of your home. HOME INVENTORY VALUE Knowing the value of your home inventory prepares you financially for unforeseen circumstances and risk management. Under-Insured Claims Collectibles Moving Recent home projects Proper reimbursement Artwork, china, after a fire, flood, or disaster requires documentation of items & more possessions means the value of replacement has Tracking the pick up silverware, oriental & delivery of your posssessions and moving insurance is rugs, jewelry, etc. requires a special gone up rider to be covered important Categorizing your inventory by room and by type of possession such as electronics, furniture, housewares, jewelry, tools, and collections will help you discuss your insurance needs with your agent. HOME REMODEL PROJECT COSTS Manage budgets, cash flow, and actual costs for all your projects. Average budget for typical remodel projects. DIY Projects $61k $16k $15k Deck Addition, $54k Basement Bathroom Kitchen Contractor Hiring a contractor or Doing It Yourself [DIY] can have an impact on your costs, but you need the skills and tools $27k to execute a DIY Project $18k $1 $11k Office Roof Siding Windows IMPORTANT Keep track of costs for tax purposes, for re-sell purposes, and updating home inventory for insurance Everything About Your Home in One Place HomeZada Home Financial Dashboards www.HomeZada.com Sources: http://www.remodeling.hw.net/2013/costvsvalue/national.aspx http://money.usnews.com/money/personal-finance/articles/2012/05/29/look-at-maintenance-costs-before-leaping-into- homeownership http://neighborhoodeffects.mercatus.org/2009/10/20/hhi-proptax/ http://www.ehow.com/info_10050591_percentage-net-income-should-utilities.html http://www.investopedia.com/articles/pf/05/030905.asp %24