Adjusting My Monthly Budget to Account for Home Ownership

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• Electricity expense – 
• This will vary as my usage varies each month.
• No action is needed.

• Home loan payment (biweekly) –
• Can be calculated using biweekly payment amortization schedule tool from previous my post.

• Comcast internet service – $30
• I will just need to remember to renegotiate this after my 6 month special offer is up – refer to previous post about asking for a discount for more details.

• Netflix DVD rental monthly fee – $15
• As long-time readers of the blog will know, I am a big fan of Netflix, as it saves me hundreds of Dollars per year on cable tv expenses.
• I will continue to pay to receive Netflix in my new condo.

• Condo Insurance – $34 per month ($400 per year)
• This is the set premium for the insurance package I bought from Erie Insurance Company.

• Property tax savings –
• The closing statement (HUD-1) that the real estate attorney prepared for me in preparation for the settlement of my condo purchase stated that I was owed a property tax credit of $77.77 for the month of July.
• Multiplying this value by 12 to get the yearly property tax, I figure this is a pretty good estimation of what my property taxes will be, as it is fairly close to the 1.5% of the property value that The Complete Idiot’s Guide to Personal Finance in Your 20’s and 30’s recommends for financial planning.
• I will need to be sure to keep in mind the tax benefits of home ownership, as the property taxes I pay on my property are tax deductions.

• House Maintenance savings –
• According to the home buying and personal finance books I read by Eric Tyson, the generally accepted practice for how to account for the various home maintenance expenses that can come up throughout the year is to save 1% of the property’s value for potential maintenance issues.
• I feel that this level of savings is appropriate, so I will set up an automatic transfer each month for 1% / 12 of the property’s value in to an online high yield savings account.

• Condo Homeowner’s Association (HOA) monthly fees –
• For now, I am using $200 per month as an estimate for how much my HOA fees will be.
• This is calculated by taking the 1 day’s worth of HOA fees that I had to pay the sellers for the 1 day in July that I owned the condo and multiplying it by 31 days.
• According to my neighbors, this fee also includes my gas (heating and A/C) bill as well. So, it sounds pretty reasonable, since it is currently the summertime, and the A/C will be running constantly to keep the house cool.

• Life dreams savings –
• As stated in the previous post about life dreams and saving for them, David Bach suggests that you arrange to have 3% of your take-home pay (after taxes) automatically transferred to a savings account each month.
• Since my monthly income will be decreasing by 67%, I simply recalculate this quantity to represent 3% of my new income. 

• Life values savings –
• As stated in the previous post about life values, these are calculated based upon how much money I need to save per month in order to achieve my specific values.
• Because of this specific nature, these quantities will not change.