Owning a Home Is Just the First Step. Here’s How to Afford Everything Else

A woman stands in front of a blue wooden barn while holding up a tiny house in front of her face.
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Homeownership is the American dream, right? We spend years — sometimes decades — saving up enough money for a down payment for our first home and mark it as a major milestone in our lives.

But sorry to rain on your parade — just the down payment isn’t enough.

Sure, you’ll get the keys and have takeout on top of a box marked “front hall closet” on your first night, but then what? You need to fill it. You need to protect it. And you definitely need to be saving up for all the leaks, breaks and “oh, sugars!” that come with that property deed.

So How Much Do You Need?

If you’re starting from scratch, the interior designer rule of thumb is to spend between 10% and 50% of the home’s value on new furniture, appliances and decor. A totally empty $300,000 house might run up a $30,000 bill. It might be less if appliances are included, you’re bringing furniture with you, or you’re a good thrifter. It could cost more if you have expensive taste.

The average homeowners insurance in the US on that same $300,000 home is about $1,200 per year. It’s higher in places like Texas and Florida (hello, hurricane season) and lower out west in Utah and Idaho. Natural catastrophes, the cost of rebuilding your home and even your credit score can affect the cost of your premium.

As for emergency savings, the rule of thumb is three to six months’ worth of living expenses — definitely on the higher end, if you’re a homeowner. Realtor.com suggests 1 to 3% of your home value, so $3,000 to $9,000 stashed away for when your dog decides to eat through a wall.

It sounds like a lot. And make no mistake; it’s definitely a big part of your home-owning investment — but it’s attainable with the right knowledge and savings tools. Here are a few ways to boost your savings and lower your home-owning costs.

1. Make Your Sure Credit Score is in Tip-Top Shape

You probably remember this from when you were buying your home — the better your credit score, the better your mortgage’s interest rate. The same is true for homeowners insurance and credit card interest rates (this is important to think about if you open a store card to spread out furniture payments).

The good news? A free website called Credit Sesame makes it easy to put your credit score on track to reach your goals and keep your loan payments low. We even talked to one guy, James Cooper, of Atlanta, who used Credit Sesame to raise his credit score nearly 300 points in six months.*** He says they showed him exactly what to do — he was even able to open his first credit card.

What could adding 300 points to your score mean for your goals? It could easily save you thousands of dollars over the life of a car loan or mortgage.

Within 90 seconds, Credit Sesame will give you access to your credit score, any debt-carrying accounts and a handful of personalized tips to improve your score. You’ll even be able to spot any errors holding you back (one in five reports have one).

Make sure your plans don’t get sidelined by bad credit. Sign up for free (it only takes about 90 seconds) and see how much you could improve your score.

2. Cut Your Other Bills to Save For More Furniture

Furnishing a house is expensive. You don’t even realize how much money you’ll need until you start pricing it all out at the store — a couch, a coffee table, a few lamps, a bookshelf, a couple side tables, an armchair or two, things to put on your bookshelf and on the wall… and that’s just in your living room!

One easy way to come up with this money is by cutting your costs and saving the difference. For example, when was the last time you checked car insurance rates?

Here’s the thing: your current car insurance company is probably overcharging you. But don’t waste your time hopping around to different insurance companies looking for a better deal.

Use a website called EverQuote to see all your options at once.

EverQuote is the largest online marketplace for insurance in the US, so you’ll get the top options from more than 175 different carriers handed right to you.

Take a couple of minutes to answer some questions about yourself and your driving record. With this information, EverQuote will be able to give you the top recommendations for car insurance. In just a few minutes, you could save up to $610 a year.

Kari Faber is a staff writer at The Penny Hoarder and a homeowner who has used these tips to save money herself. 

***Like Cooper, 60% of Credit Sesame members see an increase in their credit score; 50% see at least a 10-point increase, and 20% see at least a 50-point increase after 180 days.

Credit Sesame does not guarantee any of these results, and some may even see a decrease in their credit score. Any score improvement is the result of many factors, including paying bills on time, keeping credit balances low, avoiding unnecessary inquiries, appropriate financial planning and developing better credit habits.