Here are some home-related financial items that should be reviewed each year to ensure that you have the coverages you need and that you’re getting the most out of your money.
Part of the reality of being a homeowner is managing the financial side of running a household. Here are some home-related financial items that should be reviewed annually to make sure that you have the coverages you need and that you’re getting the most out of your money. The start of a New Year is a great time to set aside a morning or afternoon to review these important items:
The National Association of Insurance Commissioners (NAIC) suggests an annual insurance checkup to review your insurance policies. The review should include:
- The type of coverage you have
- Amount of the coverage on your home and contents, including whether your policy covers actual cash values or replacement values
- Premium amounts
- Liability limits
- Medical expense payments
- Deductibles and discounts (Would bundling your homeowners’, car insurance, and other policies save money on your premiums?)
- Additional coverage needs that may have arisen in the last year
It’s also a good idea to take a look at your home loan arrangements to see if refinancing your mortgage would be beneficial. For example, are interest rates significantly lower than when you took out your original loan? Are you in a position to make higher payments and shorten the length of your loan? Do you have a better credit rating now? Do you need a home equity loan? If you do decide to refinance, The Federal Trade Commission (FTC) suggests contacting several different lenders to get the best financing deal.
Do you have a home warranty plan, and if not, would you benefit from one? A home warranty is a service contract that covers the repair or replacement of important home system components and appliances that break down over time due to normal wear and tear. A home warranty can help save you money on unexpected, covered repairs and replacements, and can give you a reliable resource to call for service contractors when a covered item malfunctions. If you already have a home warranty plan, review your contract and see if you need to add or change any coverage options.
Review your bank and credit card statements to see how much you spent on home maintenance last year. Knowing that amount will help you budget for the coming year
, and will help you plan for future maintenance needs. See if there are any ways that you can cut back on your maintenance costs, such as shopping contractors and service providers for better rates or taking a DIY approach to maintenance projects this year.
Take a look at your energy bills for the last 12 months, and see if there are any opportunities for savings there. You can perform a do-it-yourself home energy audit or contact your local utility company to see if they offer a free in-home energy audit program.
If you routinely use credit cards for home expenses, review the credit terms, interest rates, and limits on your cards and shop to make sure you’re not paying higher fees than needed. Check any credit card balances as well so you can plan to pay them on time to maintain a good credit rating.