What are first-time homeowners wasting money on?

Buying a new home is a very exciting time. But often, first-time homeowners make erroneous decisions in their excitement.

Here are six things Trent Hamm from U.S. News suggests first-time homebuyers avoid. This is a helpful article to pass along to your clients who have just purchased their first home.

Expensive home furnishings. Often, a person’s first home is much larger than the places they’ve lived in before. This leaves a person with a lot of empty space and the tendency is to fill that space with new furnishings. Many homeowners follow their first day in a new home with a day at the local furniture store, often buying more new furniture than they can afford.

If you’re considering new furnishings, give it some time first. Buy low-end items if you really want to fill the space, and then gradually replace them as your savings allows. Don’t fill up your credit card with expenses from the local furniture store.

Private Mortgage Insurance. Many first-time homebuyers are saddled with this terrible expense that comes from buying a home without a 20 percent down payment. Often, this adds $100 or more to your monthly mortgage payment with nothing in return.

Get rid of this as soon as you can. The best possible time to make a few extra mortgage payments is in the first few years of the mortgage. You’ll not only get rid of that PMI early, you’ll also greatly reduce the lifetime interest you pay on your mortgage.

Appliance insurance. Many new homeowners are offered a “deal” on appliance insurance, in which they pay some insurance company a certain amount each month to “insure” their appliances against natural failure.

Why is this a bad deal? It’s far more expensive than just saving that same amount in a savings account. Rather than buying an unnecessary insurance policy, simply put an amount equal to the monthly premium into a savings account. Within a year, that savings account will cover any necessary appliance replacements.

Lawn care services. The idea of a lush lawn outside of your beautiful new house sounds appealing, and lawn care services know that. They’ll hit you hard right after you move in, showing you gorgeous images of what your lawn might look like.

In essence, they’re just charging you a lot for what you could easily do yourself with a bit of fertilizer, a bit of natural herbicide and a simple dispenser. It costs far less per year to care for your lawn yourself, and it doesn’t take much time, either.

You may decide later that you do want the service because it will serve your lawn better than what you can provide. That’s fine, but find out what you can actually do first. You’ll probably find you can handle it well on your own.

Energy inefficiency. Like it or not, energy inefficiency is a real expense for new homeowners, and it’s often one they overlook. Newly purchased homes often come with cheap, inefficient light bulbs in the sockets. They also often come with older windows and walls that offer poor insulation. On top of that, homes that aren’t air sealed allow warm air to escape in winter and cool air to escape in summer.

One of the most important things you can do to curb your future expenses as a new homeowner is to perform an energy audit on your home. There are many guides to performing do-it-yourself energy audits online, like this one from the Department of Energy. Finding areas where your home is energy inefficient, and fixing those issues sooner rather than later can save you a lot of cash.

Insurance. In the rush to buy a home, many homeowners fail to adequately shop around for homeowners insurance.

As soon as you’re settled, take some time to shop around for homeowners insurance. If you spend that time effectively, you can usually knock as much as 30 percent off your insurance premium, which is a lot of cash back in your pocket.

Taking some smart steps when you first move into your home can cut your bills and minimize your expenses for the time you own that house. Make these smart moves now, and your wallet will be happy.