News & Insights

“Owning a home is a keystone of wealth — both financial affluence and emotional security.” — Suze Orman

But here’s the part Suze doesn’t always emphasize: your mortgage is just the beginning.

Related Page: Are You Saving for the Short-Term or Long-Term? Choosing Between a Savings Account and CD

According to a 2024 Bankrate study, the average homeowner underestimates their annual homeownership costs by over $3,000. That’s not pocket change. That’s vacation money. Emergency fund money. Peace of mind money.

So if you’re thinking about buying a home—or you already own one and you’re wondering why your bank account feels like it’s bleeding slowly—it’s time to look beyond your monthly mortgage.

Let’s talk about the real costs of homeownership. The ones that don’t show up on your Zillow estimate. The ones that matter just as much—if not more—than your principal and interest.

In this post, we’ll break down what costs to expect, how to plan for them, and how to protect your financial sanity while still loving the home you worked so hard to afford.

Let’s dig in.

Section 1: The True Cost of Homeownership

Your mortgage payment is only the tip of the iceberg. What lies beneath?

Property Taxes

Your mortgage lender might escrow property taxes for you, but that doesn’t mean you’re not paying them. In Florida, for example, the average property tax rate is about 0.83% of assessed home value—but that varies widely by county and exemptions.

Action Step: Before you buy, visit your county’s property appraiser website. Look at recent tax bills for similar homes and plug those numbers into your long-term budget, not just your closing calculator.

Homeowners Insurance

Homeowners insurance isn’t optional if you’re financing. And in states like Florida—where hurricanes are always flirting with the coast—it’s anything but cheap. In fact, Florida has the highest average home insurance premiums in the U.S. as of 2024.

But it gets trickier. You might also need windstorm coverage, flood insurance, or sinkhole riders, depending on your home’s location.

Pro Tip: Don’t rely on an average quote. Get specific quotes from multiple providers before you close. And review your policy annually.

Section 2: The Big Three Non-Mortgage Essentials

Utilities

You’re not just lighting a space—you’re powering a lifestyle. Utilities often include:

• Electricity
• Water & Sewer
• Gas
• Trash & Recycling
• Internet
  
  

Depending on your home size, insulation, and appliance efficiency, utilities could easily cost $300–$500/month, if not more.

Action Step: Ask the seller or previous owner for copies of recent utility bills. Factor in seasonal spikes—especially if you live in a hot climate with high summer cooling costs.

Maintenance & Repairs

This is the sneaky one. You don’t feel it until your A/C dies or your roof leaks during the first rainy season.

A good rule of thumb? Budget 1%–2% of your home’s value annually for maintenance. So on a $400,000 home, that’s $4,000 to $8,000 a year.

But if the home is older, bump that number up. Systems wear out. Trees get invasive. Foundations settle. It's not glamorous, but it’s real.

Pro Tip: Open a separate high-yield savings account just for home repairs. Treat it like a recurring bill. That way, when something breaks—and it will—you’re ready.

Homeowners Association (HOA) Fees

HOAs can be helpful or infuriating. But either way, they come with a cost. These fees can range from $50 to over $500/month, depending on amenities and community rules.

Before You Buy: Read the HOA bylaws. Look for capital improvement fees, upcoming assessments, and restrictions. If you’re paying hundreds of dollars a month, you deserve to know what you’re getting—and what you’re not.

Section 3: Lifestyle Upgrades That Add Up

Once you move in, your house starts whispering: “Paint me.” “Upgrade me.” “Furnish me with something that isn’t from your college apartment.”

Furniture & Decor

If you’re moving from a rental or a smaller space, you’ll feel the pressure to fill rooms—fast.

Strategy: Prioritize rooms you’ll use daily. Sleep on a quality mattress before you spend $6,000 on a designer dining set you use twice a year. And buy used or clearance—Facebook Marketplace is your friend.

Landscaping & Lawn Care

You thought mowing was just once a week? Add in:

• Fertilizer
• Sprinkler repairs
• Tree trimming
• Mulch refreshes
• Pest control
  
  

It’s easy to drop $100–$300/month on outdoor upkeep. And that’s if you’re doing most of it yourself.

Tip: Budget seasonal landscaping refreshes and plan for regular service if you’re not into DIY.

Section 4: Long-Term Planning Costs

Appliances & Systems Replacement

Even if your home inspection says everything looks great, every appliance has a shelf life:

Pro Tip: Ask for the age of major systems before buying. Then, create a replacement timeline with estimated costs. This helps you stagger upgrades instead of getting slammed all at once.

Home Improvements & Renovations

At some point, you’ll want to renovate. Whether it’s a new kitchen or upgraded bathroom, costs can range wildly.

• Minor remodel (e.g., painting, fixtures): $5,000–$15,000
• Major remodel (e.g., full kitchen): $25,000–$60,000+
  
  

Tip: Budget 10–15% more than your initial quote. Renovations almost always uncover something unexpected.

Section 5: How to Actually Budget for All This

Build a Homeownership Budget (Not Just a Mortgage Budget)

Break your annual home expenses into these buckets:

• Fixed Costs: Mortgage, taxes, insurance, HOA
• Monthly Essentials: Utilities, lawn care, pest control
• Variable/Annual Costs: Maintenance, repairs, savings for upgrades
• Discretionary: Decor, upgrades, improvements

Use the 50/30/20 Rule (Modified for Homeowners)

Classic rule:

• 50% needs
• 30% wants
• 20% savings/debt payoff

As a homeowner, tweak it:

• 45% needs (include realistic home costs)
• 25% wants
• 30% savings/maintenance/reserves

That last category is your safety net.

Create a Home Expense Calendar

Set quarterly calendar reminders to:

• Review utility and maintenance costs
• Shop home insurance rates
• Top off your home repair fund
• Schedule routine maintenance (A/C checkups, gutter cleanings)

Section 6: Smart Tools to Keep You on Track

• YNAB (You Need A Budget) – Great for planning fixed and variable costs
• Personal Capital – For tracking home equity and net worth
• Spreadsheets – Customizable and still king for many homeowners
• Home Maintenance Apps – Like Centriq or BrightNest for reminding you when to clean your dryer vent or flush the water heater
  
  

Peace of Mind Over Perfection

Homeownership doesn’t have to be stressful. But it does have to be intentional.

You don’t need to obsess over every penny, but you do need to think beyond the mortgage. Budgeting smart means fewer surprises, fewer panics, and way more time to actually enjoy your home.

Because your house should be your haven—not your headache.

So build that honest budget. Plan for the “invisible” expenses. Keep cash in the wings for the big stuff.

And when the roof finally needs replacing, you won’t freak out. You’ll say, “I’ve got this.”