Ah, the house never ends! I seem to find myself writing quite a bit about the cost of living in a house and the controllable/sometimes not so controllable costs associated with home ownership as well. After various discussions with people and bills being paid – I’ve decided to write about the surprising increase in housing expense over three areas of living in a house – Insurance, Property Tax & select Utilities! Come check out the “fun”!
Three Housing Expense Increases
The three housing expense areas that have increased are very straight forward today, haha. They have to deal with my fun privilege to talk about house insurance, property tax and the local water/sewage bills. This year, more than a “cost of living” adjustment has occurred and I wanted to share that with the readers for a few reasons: Gauge your thoughts, see if you have suggestions and to describe my plan in hopes of finding feedback from everyone! Here are the three housing expense increases I am dealing with:
1.) Insurance – As always – you need to be insured, no doubt. When I first bought my house, my home insurance, which was bundled with auto, was a meager $460 on the year! Talk about amazing. However, my house had a new roof, new appliances, new driveway/paved, and had a “younger” feel to it. However, from fall of 2011 through Spring of 2017, my home insurance is now a sweltering $729.00 or an increase of $269 over 5.5 years ($88 from last year). That doesn’t seem like a lot, but I am not too far from this being doubled! What the heck? Did my risk get that much higher? I haven’t had any claims. We do receive a lot of snow – is my roof more beat up? Talk about tough here. I am on the verge to negotiate and to shop out my insurance. The reason why I am with the current company, is due to my CPA discount that I receive with my membership in the AICPA, as other providers were at or below where I currently am. Per the valuepenguin.com, the average house insurance in Ohio is around $663, but with my house at 1,400 square feet low maintenance property, should it really 10% more to cover my house? Now, my auto insurance premium is $160 less this year, but I plan on shopping both, as a bundle, out to other parties. In total, between house & auto, I am roughly at $1,367 all in for the year. How does that relate to you?
2.) Property Tax – Here we go again. From 2015-2016, the property tax only went up 2%. However… from 2016 to 2017, my property tax is up 5.41%?!?! Holy crap, was my first reaction to this increase. The value from the property tax record of my house did not increase, so this was purely a higher rate being applied for taxes. This has added an extra $222 annually to my property tax bill. Not something I had expected, at least with such a large percentage increase, that’s for sure. One thing has been learned – expenses don’t traditionally go down… so much why you have to fight for each dollar, as every dollar counts in this life.
3.) Water & Sewage – Our city of Cleveland has imposed quite a few massive updates to our water & sewage system. Articles were released last year about a rate hike of 41%+ over the course of 5 years, as well as going to a monthly billing system, as opposed to quarterly that they’ve been. So what does this mean for me? Let’s just say – the first 5 months water/sewer bill last year was approximately $122. The first 5 months of this year has added to $184. That’s a whopping $62 more! Just insanity if you ask me. Though it’s only an extra $12 per month, it’s a large % increase, nonetheless. I am going to purchase the toilet water tank bags, to see if I can conserve a little bit of water, and though doesn’t apply here – I will be insulating my hot water tank, as well, to offset some costs potentially through there.
The chart I’ve created below details how the $ & % impacts from the changes above. Looks like my cost of living from having no extra value or added benefit, just increased 9.50%!!!! Does this make sense to anyone??
In order to have no “change” in the way I save or live my life – I would have to earn, using a 30% tax rate, an extra $680 in order to pay for these additional costs! How hilarious is this?
The plan of action
First – I will begin shopping around for a better package with home/auto, as the increase keeps creeping up and I still do believe my auto insurance is high for a 2010 Honda Accord. This will occur in the upcoming 3 months. I hope to at least see what else is out there, or I may end up coming back to my current provider and asking for other forms of a discount.
Secondly – I will research and see what has caused my increase in property tax. I don’t want to jump the gun here, but want to compare my neighborhood to see if they have a similar rate as I do and to see what’s going on, i.e. if anything new was passed.
Third – I will implement conservation efforts surrounding water/sewage to reduce the impact further. I’ll see if I can reduce other utility costs in gas/electricity to further offset the increase in costs from water/sewage. I’ll have to remember to look back at this article to see if it was accomplished or not. Further, I can also find a lower $ per MCF for gas, and even see if there’s a provider out there with a one time bonus as well. I’ve seen them out there, but not too often.
Conclusion
There have been a few lessons learned over the areas that have had an increased housing expense. To begin, the decision to live in this house is mine, therefore, I must handle the situation. You have to fight your way to keep as much money as possible, as no one else will. Further, there are other adjustments to off-set the impacts of these increases – saving on other utilities, reducing your driving to reduce gas cost, paying off your auto loan to open up cash flow and even to shop out your insurance plans and/or negotiate lower. You have to do this, as it’s up to you to control the situation to the best spot that you can.
As with all things – if there are services/value that you are receiving with the increase in cost – then okay. If it was a “promotion” that may have expired – slightly more understandable. However – in the 3 areas above, there’s been no real additional benefit, just that prices are being pumped!! Quite amazing, at least as of right now, to me.
How does everyone feel about their housing costs? Able to keep up with this “inflation”? Are you able to maintain your housing costs and/or even reduce them? Would love to hear from the community please! Any tips/suggestions would be appreciated, as always.
-Lanny