When you first read or hear the word “audit,” it may strike fear in your heart. Perhaps you have spent your adult life trying to avoid an audit from the IRS. If the word audit sounds like a bad word to you, don’t let it! An audit is simply an examination or verification of your accounts and records, particularly those accounts that are financial in nature. In its simplest form, an audit is just a check-in with your financial life.
As a homeowner, you should be doing an internal home audit every six months or so just to make sure your home and your money is working for you. Below are five major areas to address when you are giving your home operations an examination.
Utilities
Check in with each of your utility providers to ensure that you are taking full advantage of any programs they offer. Many provide savings when you implement green or energy-saving measures. Others will offer options like bill leveling in order to have a fixed billing amount each month based on patterns of usage with water, gas, or electricity.
Energy Use
After taking a look at your utility costs, another layer of digging may reveal that some of what is costing you so much is your own family’s use of these energy utilities. Beyond lowering your bill, what might tweaks on the thermostat, unplugging small appliances, using less light, or taking fewer baths do to decrease your monthly costs? While it may not break the bank to keep your house refrigerator cool in the summer, it might be worth investigating to see where small changes may have a big impact. Installing solar panels may be out of the question, but switching out more energy-efficient items like air filters, light bulbs, and window blinds could pay off.
Subscriptions and Services
What are the things you pay for monthly to run your home? Cable, internet, streaming services, home security monitoring, maintenance, lawn and garden, and large appliance warranties can certainly add up month to month. When you audit these, consider first if you are using each one and maximizing its benefits. If you decide that you are, then don’t hesitate to reach out to customer service to ask about lowering your bill based on usage, longevity, or customer loyalty. The answer may be no, but it never hurts to ask. Furthermore, in your research, you might find a comparable competitor that could save you additional dollars as well.
Insurance
Many of us get comfortable with keeping our insurance companies around because we have been with them forever. While loyalty isn’t always a bad thing, if you haven’t shopped around for insurance lately you might be surprised to find that there are savings to be had. Many military families who tend to bundle homeowners, auto, and renters insurance should be checking rates at least once or twice a year to make sure they are still getting the best deal. Not everything with insurance is about the bottom line or a monthly or bi-annual bill. There are other benefits to consider before making a change in your insurance such as roadside perks, deductible amounts, and discounts available based on a variety of things.
Mortgage
You probably hear it all the time, “Mortgage and refinance rates are at an all-time low,” but the statement is actually true. Now is a great time to consider refinancing your home. If you truly want to reduce your monthly expenses in the short term or reduce the amount of interest and years to pay off your home in the long term, there’s no better way to do that than by refinancing your home. Reducing your current interest rate by at least a full percentage point is the standard recommendation to be sure you’ll see significant monthly savings. For those using a VA Loan, there are some great programs out there for re-financing both a permanent residence as well as investment or rental property.
When it comes to doing an internal home audit, it may take you a bit of time to contact, connect, and negotiate with companies providing you goods and services. If you can be persistent and patient, in most cases your auditing will pay off. Consider what you might be able to do with a few extra hundred dollars per month once the work is done!