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Accounting Tips for New Home Owners

by Greg on November 18, 2017

new home owners

A recent report from the Australian Bureau of Statistics highlights the rising cost of living, showing families are spending around $190 more per week than they were six years ago.

Household expenses account for much of the additional burden, with new home owners likely to feel the pinch more than others.

Keeping meticulous control of the weekly or monthly budget helps you stay on track and not spend what you don’t have (or at least spend it wisely if you temporarily can’t avoid it). Few of us relish the thought of a regular bookkeeping date, so here are some tips to make it quicker and easier:

Make a List of New Expenses

Moving into a new home creates a different or additional set of expenses, which might include:

  • Home insurances
  • Maintenance bills
  • Higher fuel and energy costs
  • Extra travel costs if you’re further away from work

You’ll also be more aware of fluctuations in interest rates when these are likely to affect your mortgage payments.

Regardless of how you manage household spending, review the types of expenses you had when renting, house sharing or living with parents, and compare them to the ones landing on your doormat now. Estimate how you’ll need to juggle previous money allocations, and make new columns in budgeting software or notebooks so you can keep track.

Hang onto Receipts and Note All Transactions

New home ownership generates lots of paperwork, and you’ll have receipts for all kinds of things, from surveys to solicitor’s bills and household items bought.

Start a household folder where you can keep all the receipts in one place, transferring their details into your accounts. The types of details to include are:

  • Whether the transaction was into or out of your bank account.
  • The date and method of payment.
  • How much was paid.
  • What the payment was for.

Over time, noting down every financial transaction gives an overall picture of spending habits and amounts. You can see at a glance where you’re spending too much, and estimate likely costs in the future. This knowledge gives you a sense of power; you understand your finances and are in control. If, for instance, you know you’ll need to carry out some household maintenance in around six months, you can start to budget now and not feel any financial pain when the bill comes in.

Pop all your receipts into their relevant file or envelope in your household budget folder, starting a new one each month.

Set Aside Time for Bookkeeping

Letting basic bookkeeping tasks sit on the back burner leads to muddle and confusion. The longer you leave it, the bigger the job becomes as expenses pile up every day. If you really can’t face it, or can’t work out a system you can stick with, a professional bookkeeper could help you get, and stay, organized.

Assuming you’ll first have a go at keeping your own accounts, try to set aside just half an hour each week to bring your books up to date. It may not take half an hour if you’re organized with receipts, or you may find you need a little longer.

Remember to include income as well as expenses, noting down interest payments from savings as well as any dividends, bonuses or other kinds of income. Balance out your books each week, and if there’s money left in your account, transfer it to a ‘rainy day’ savings account to help pay for emergencies.

As a new home owner, you’re totally responsible for every little expense the house generates. It’s an exciting time and one that’s rich with new experiences and future plans. Simple household accounting helps those plans become reality.

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