Overspending On Your House
When it comes to aging, most seniors rank finances as one of their greatest concerns. Spending on your home can easily become your biggest expense. How do you know when you spend too much on your house? What are the issues? What do you need to know about the issues?
Homes are everything to seniors. Carmen and I found that among seniors’ top three concerns, staying in their own home was always one or two. There are many reasons for this concern: familiarity, comfort, pride, fear, tradition, accomplishments, financial, emotional, and habituation. The reasons don’t really matter, what matters is people don’t want to leave their home because its part of their psychological and emotional health and identity.
Overspending On Your House
Anytime something becomes part of your mental health it can take on extraordinary meaning. Placing too much meaning on one’s home, in turn, can easily lead to devoting too many resources to your home. As seniors, we age, and we age badly. It’s natural. But our houses can be kept youthful. I can remodel my house and keep it clean inside and out. And if my house is youthful, and I associate my house with my psychological well-being, I probably feel better too.
There are lots of rational reasons I may use lots of resources to keep my house up to date. I may want to maintain the resale value, I may want the house maintained because I have other family members living with me, or I may have to maintain the house because of homeowner association requirements or requirements in a reverse mortgage.
Knowing when you overspend on your home is pretty easy. If you keep a budget. And you should. See our section on home expenses here. These expenses will help you create a housing expense budget.
Types of Overspending On Your House
Regardless of the reason why I spend money on my house, it’s easy to spend too much. Here are some common annual household expenses for a 2,000 square foot home.
Many seniors overspend on their house by remodelling. Remodelling costs vary dramatically. Know what they are and what you can afford.
> Bathroom – $10,000
> Kitchen – $25,000
> Living room – $7,500
Maintenance is often forgotten as we age. Although most seniors understand in this category, other overspend on their house.
> Season of lawn mowing – $1,000
> Season of gardening – $1,500
> Annual housecleaning – $2,500
Annual Insurance & Utilities
> Gas – $2,000
> Electric – $2,000
> Water – $1,200
> Trash – $600
> Fire – $1,500
Acts of God
> Water & wind – $1,500
> Earthquake – $10,000
These costs are not shown for you to compare, they’re shown to alert you to how incredibly expensive owning a home can be. Even when a home is paid off, the annual maintenance costs can be in the tens of thousands of dollars.
Signs You’re Spending Too Much On Your House
What are some signs that spending is out of control? The first thing Carmen and I recommend you look for is a budget and a plan. We can’t say this enough. If you are engaging in large expenditures and you don’t have a budget, a plan and a way to evaluate the actual expenses, you’re likely to have a problem.
So how do you know if you’re spending too much? CarePlanIt helps you fully analyze that is here.
Quick Ideas To Minimize Overspending On Your House
As the spender, have a plan, a budget and track actuals against the budget. See our section on budgeting here.
If you’re evaluating the spender, ask for the plan, the budget and the evaluation of results