If you’re like most Americans, your New Year’s resolutions revolved around personal improvement: Lose weight, exercise more, give up alcohol or coffee. And if, like most Americans, you’ve already botched those resolutions, consider another approach. Make new resolutions for your home instead, of for yourself.
As a homeowner, your residence is probably your largest and most important investment. So it’s crucial to keep that investment working for you, even if that means doing a little work. If you need more incentive, consider that homeowners’ resolutions are more straightforward than personal promises. Doesn’t spending an hour here and there on your house and finances sound easier than forgoing sweets?
Herewith, six suggested resolutions for homeowners. Pick one or two to commit to keeping, or if you’re feeling ambitious, shoot for all six. If you follow through, you’ll have a better home — and a better investment — by the year end.
1. Get control of your home equity line of credit.
Perhaps you’ve tapped the equity in your home for expenditures like vacations, unexpected bills or property tax payments. Stop! In 2008, you will cease to charge anything to this line of credit, even home improvements, which were the original intent of home equity loans. “They’re not a piggy bank,” says Catherine Williams, Vice President of Financial Literacy for Money Management International, a non-profit credit counseling agency. “And home appreciation is not in the bill of rights.”
In a slow or declining real estate market, the danger is that you might tap out any profit from your house, not a good scenario in the event you need to sell it. Scary? Yes. Williams recommends that after you’ve ceased making new charges to your home equity account, adjust your household budget to start paying down the balance. (If you don’t have a household budget, you’d better add that to your list.)
2. Save money by saving energy.
With several months of winter remaining, it’s a great time to make sure you’ve covered the basics, like heat. Begin with your thermostats. Are they set at 68 or lower during the day, 58 when you’re sleeping and 64 when you’re away for more than four hours? They should be. Investing in programmable thermostats can help make this change automatic. The cost is $40 to $50 per thermostat and can yield a 10 percent annual savings in your energy bill.
“Don’t stop there,” says Ray Kamada, an energy conservation consultant who retrofits homes and works with Homeminders, a house maintenance web service. “Eliminating air leaks and properly insulating your home can have a tremendous impact too.”
Other easy changes that will yield small savings: Set your hot water heater to 120 degrees when you’re home (use the vacation setting when you’re away), keep your refrigerator full, set your dishwasher to air-dry, and use your ceiling fans to blow upward at low speed. When you’re feeling motivated, you can investigate purchasing renewable energy from your local utility. Some utilities sell wind power to customers, although it may come at a premium. Also, most utilities offer free checkups to consumers, showing where you could do better at conserving.
3. Review your property tax assessment.
This year, resolve to actually read your property tax assessment when it comes in the mail. A mistake in this assessment can lead to paying too much tax, so make sure the assessor has gotten the basic facts straight about your house.
“Errors happen. People are human,” says George Relias, an attorney with the Chicago property tax firm Fisk, Kart, Katz & Regan. “Some errors may not result in reductions, but some will.” Relias suggests looking closely at your square footage and number of bedrooms and bathrooms. If you find a significant error, call or visit your county or city assessor’s office, politely point it out and request an adjustment.
4. Take inventory of your household.
Perhaps you remember your insurer telling you to inventory your possessions in case you were to lose some or all of your possessions to a natural disaster, or even a robbery. If you’re typical, you didn’t do it. The task of documenting your entire household is daunting, so in 2008 do something to get started, says Dick Luedke, spokesperson for State Farm Insurance. “Sometimes just getting 1 percent done can get you past the intimidation barrier.”
First, list your most expensive items. Document the make and model of each item, where it was purchased, and for electronics, the serial number. You can use a video camera and simply walk through your home, filming and narrating as you go. Next, count up your smaller items, recording the number of shoes, CDs, pots and pans, etc. State Farm offers tips for taking inventory.
5. Make one green commitment.
In addition to saving energy at your house, try to make a behavioral change that will foster a better environment. Though this won’t necessarily boost your bottom line, it will make your house a better place. If you don’t currently recycle bottles and newspaper, attempt it. If you haven’t installed compact fluorescent lightbulbs, do it. Or ditch toxic cleaners in lieu of environmentally friendlier solutions such as the Method or Simple Green products. (You can even make your own.) Come spring, consider creating a compost pile in your yard. Easy-to-follow instructions are available on lots of sites online, including Compost Guide.
6. Nurture your dreams.
Amid all the nuts-and-bolts steps outlined in the preceding resolutions, remember that it’s also essential to fantasize about the future of your dwelling. Many home improvements add value to your property; even if they don’t, they will enhance your experience while living there. If you’ve always wanted a new kitchen, or a patio with a hot tub, or a studio workspace, start planning for your dream in 2008. Buy a document organizer and begin collecting colors, styles or treatments that inspire you. Conduct preliminary research by asking friends and family members for recommendations of contractors and other resources you’ll need for your project. Of course, prepare a budget and begin saving. Even if the actual project isn’t begun until 2009, you’ll be happier and better prepared.