6 Home Expenses You Have To Budget For (Beyond Your Mortgage)

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The costs associated with owning a home go way beyond the amount on the mortgage. 

The combined expenses of utilities, taxes, insurance and repairs cost homeowners big money. In fact, Forbes reported that all of these “hidden costs” equal an average of $14,155 per year.

Are You Prepared for All the Expenses of a Home?

In this article, we’ll go over some home expenses and costs that fall outside of the monthly mortgage. Here are some quick links to get you started:

The expenses we’ll discuss are for a typical home. If you’ve got a multimillion-dollar mansion, or on the other end of the spectrum – a fixer-upper, or a foreclosure in poor condition – you could be on the hook for a lot more money.

Money expert Clark Howard says no matter what it costs for you to be a homeowner, you need to make sure that you’re not overspending in a way that detracts from the rest of your life.

“Housing prices escalated so much over the last few years. You’ve got to be careful you don’t end up house-poor where you take away from everything else you should be doing in your life because you’re trying to stretch to the breaking point to afford a house,” Clark says.

Home Expenses You Need To Account for

1. Utilities

Utilities can eat a hole in our monthly budget. These include your electricity bill, heating fuel, water, sewer, garbage, phone service, cable, and/or internet, all of which can increase.

For example, the average monthly electricity bill in Georgia is $134. For the year, that’s $1,608 — and that’s just one utility. Imagine how much you could keep in your pocket, if you made an effort to save on your light bill by using LED lights.

According to the U.S. Department of Energy, LED lights use at least 75% less energy and last up to 25 times longer than normal bulbs.

Read our guide on how to save on utilities.


2. Property Taxes

You’ll have to pay property taxes each year — even once you own your home free and clear. In 2021, the median property tax bill in the United States was $1,682, according to the Tax Foundation, a tax policy nonprofit organization.

The bad news is that your property taxes increase with the value of your home.

The good news is that your property taxes may be deductible, depending on your state.

More good news? You may be able to save on your property taxes.

3. Homeowners Insurance

Typically insurance premiums increase each year. You may want or be required to have supplemental insurance for disasters such as floods and earthquakes or elect to increase your coverage if you acquire more valuables. Shop around if this stretches your budget.

Our guide on the best and worst home insurance companies shows that choosing the right insurer can pay dividends for your wallet. Clark is a fan of two of them:

“Amica and USAA may not have the best premiums,” Clark says. “But remember my rule: Homeowners insurance is only for use in a catastrophic situation, so it’s crucial to have the best coverage in case something does happen to your home.”

4. Private Mortgage Insurance (PMI)

If you purchased with less than a 20% down payment, you may be required to pay PMI for several years until you build at least 20% equity, or for the life of the mortgage. Double-check with your lender for how long you must pay.

According to the Consumer Financial Protection Bureau (CFPB), federal law provides rights to remove PMI payments for many mortgages.

“You have the right to request that your servicer cancel PMI when you have reached the date when the principal balance of your mortgage is scheduled to fall to 80% of the original value of your home,” the agency says on its website. “This date should have been given to you in writing on a PMI disclosure form when you received your mortgage. If you can’t find the disclosure form, contact your servicer.”


5. Homeowners Association (HOA) Dues

Not all homes have homeowners associations, but if yours does it’s important to know that the amenities and services provided by HOAs vary considerably. They may or may not include full or partial landscaping services. HOA dues can increase as their budget requires.

Clark acknowledges that some people love HOAs because they uphold the standards of the community, but others don’t think so. Here’s his warning on HOAs:

“Here’s a little secret if you’re buying new construction in an HOA community: The developer always keeps fees artificially low upfront to attract buyers,” Clark says. “Then when the building goes to management, the fee has to escalate quite rapidly.”

“Another thing to consider if you plan to stay put indefinitely in an HOA community: Think about how that HOA fee can grow over time. Fees that seem benign now could wind up being a budget buster down the road,” he adds.

6. Repairs & Maintenance — Big and Small

While it is important to account for the big-ticket home repairs (think: a new roof), don’t forget about the regular maintenance tasks like changing HVAC filters, annual termite inspections, cleaning supplies, gutter cleaning, window washing, etc.

How To Save for Home Expenses

Start an Emergency Fund

Clark is a big proponent of having an emergency fund. At some point, you’re going to have to replace the roof, large appliances, furnace, windows and more.

“If you don’t have savings, then you’re not prepared for the ‘oops’ in life,” Clark says. “Because ‘oops’ happen — all different types and sizes — and a lot of times we’re not in a position to deal with them.”

Read our Emergency Fund Guide to learn how to save money,

Plan for Maintenance Projects

You can save some money by doing some of these smaller home maintenance jobs yourself. Whether it is improving your curb appeal or installing a security system, you can probably do it yourself for less — with a little elbow grease and perhaps a YouTube tutorial or two.  

While of course, you will pay more if you decide to outsource and hire a professional, don’t forget to put aside some cash for supplies even if you do it yourself.

No matter whether you go DIY or pro, here’s how to come up with a simple monthly budget for home maintenance:


Add up those expenses for a full year and divide by 12.

Don’t have enough expenses to do the math yet? A recent report by Thumbtack states that the average home maintenance costs just reached a new high of $6,663 per year.

Adopt a Cheaper Lifestyle

To really save money, you may need to change the way you live to reduce your costs. Here are some ways you can save today:

Final Thoughts

Buying a home can be one of the best — and most expensive — decisions you make, so you need to prepare yourself for the financial toll. How does it start? It all begins with creating a monthly budget and sticking to it.

With a budget, you can track where all your money is going each week and month. Make sure you include all of your monthly expenses such as house or rent payments, utilities, loans, groceries, savings, maintenance costs, childcare and anything else that you’re spending money on.

Want more ways to reduce your monthly expenses? Read our in-depth Daily Savings Guide.