Balancing Homeownership Costs: A Guide to Making the Most of Your Finances

For many, homeownership represents an important life milestone and a key piece in the puzzle of financial security.

However, dealing with the financial intricacies involved in maintaining a home can be a complex challenge. From understanding tax credits to preparing for the inevitable, homeowners have a lot to consider if they are to make the most of their investment and ease future financial burdens.

Maximizing Tax Credits

According to the IRS, nearly 1 in 5 eligible taxpayers don't claim their "Earned Income Tax Credit" (EITC). In 2022, approximately 23 million filers received $57 billion from EITC, a tax break aimed at low-to-moderate-income workers.

The EITC can mean a massive financial boost, especially for homeowners with additional expenses. Though it's seen as somewhat complex due to multiple eligibility requirements, taking the time to fully understand and claim this credit can result in substantial savings. The IRS offers resources to help filers claim this credit effectively.

The Implications of a "Death Note"

Create a "death note" and keep it updated. This document, which is basically a detailed breakdown of all financial accounts, logins, contacts, and other crucial information, is designed to ease the administrative burden on your loved ones after you pass away.

While it isn't legally binding, it functions as a roadmap, guiding the bereaved through the often daunting process of tying up financial loose ends.

The Financial Reality of Current Housing Costs

Many homeowners and renters are currently bearing a high cost burden. The America's Rental Housing report by Harvard University reveals that half of the renters in the U.S. spent more than 30% of their income on rent and utilities in 2022.

With rising living costs and stagnant salaries, homeownership has become both a blessing and a major challenge. Protecting yourself with a home warranty plan can help mitigate some of these unexpected costs, providing homeowners with much-needed financial security. Such plans afford homeowners peace of mind, knowing they are protected against unexpected repair or replacement costs.

Efficient financial planning is a foundation for successful homeownership. By maximizing tax credits, preparing a detailed "death note", and understanding the current financial dynamics in housing, homeowners can secure financial peace of mind.

Credits:

• Nearly 1 in 5 eligible taxpayers don't claim this 'valuable credit,' IRS says
• ‘Sorry I am dead’: Why a ‘death note’ is as important as having a will, advisor says
• Rental markets are softening, but half of U.S. tenants spend more than they can afford, Harvard report finds