How to Plan: Bigger House, Bigger Expenses

Updated on June 17, 2013
J.G. asks from Chicago, IL
15 answers

I've found what looks like my dream home (i just need a nice view of the Rockies and I'd be set!), and before I totally fall in love with this place, I'm crunching numbers like crazy to see how house poor we will be. I have no clue how to plan for higher utility bills. Any suggestions? ideas? The house is double our current house. Should I just double utilities bills?

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So What Happened?

Just to be clear: we will be house poor because we currently only spend 9% on housing costs. We are looking to up this amount to roughly 25%. We will be able to afford the new space, but we won't be able to afford our current lifestyle. I don't think this will be a bad thing, as it will force us to trim the fat, and in the long run, we will build a lot more wealth.

Btw, we do not have any problems with our foundation! We just aren't sure it can support a second story. I haven't called an engineer yet to find out for sure, but there is nothing wrong with our current house! It's just too small.

Thanks everyone! I plan on making a detailed list of all the things the house needs with the help of on inspector. I have already thought about added maintenance expenses, etc. we won't need to buy much more furniture, just a kitchen table. I have a bunch of stuff in storage at my moms house, including a piano. I also plan on making a list of all the things I want to change, carpet, etc.. Usually we use our tax return to do things to our house. Hubby also always gets a bonus. In a bad year the bonus is still a good amount after taxes, so we will have money coming in to fix things up.

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answers from New York on

Get copies of all utility bills from the previous owner. I would double everything you are paying now.

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answers from Erie on

If this is a house you are looking to purchase, call the utility companies and ask for their help. We have always been able to check the gas, water, and electricity usage of our homes (apartments or houses) before we moved in.

Don't put yourself in the position of being "house poor". It's better to always be able to afford where you live than always be in fear that if something happens you will lose it. Even when we lost our business in 2009 (with NO savings left and only $1000 in our pockets), we didn't lose the house because we didn't get sucked in to buying above our means when we bough tin 2004.

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answers from New York on

Aside from higher utitlity bills, a bigger house means higher maintenance expenses. ie; more bathrooms means more future renovations. Bigger kitchen = more expensive to renovate when it needs it. More space means more furniture to buy and replace. Bigger yard if that's the case also will mean more bushes, trees etc to maintain and replace when needed. We don't really "budget" but when i look at our expenses, I factor in a monthly accrual for this stuff. Replacing a the roof shouldn't be a one time unexpected hit but saved for every month for x number of years. Same with repainting which obviously will be more with a bigger house. Windows sometimes need to be replaced... Carpet etc. So I would factor all that into your monthly expenses even if cash isn't going out the door every month.

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answers from Columbia on

The listing agent/seller should be able to tell you approximately what the average monthly utilites have been for the past year, or you can contact the utility companies and just ask.

We moved from a 1200sf place to a 3400sf place. There are a lot of factors. Is the house new or old? Double-paned windows? How old is the furnace/AC? Window or central AC? How old is the water heater? Are there water saving aerators on the faucets and showers? Is there an attic fan? Is everything sealed up tight, or are there gaps in the doors and windows that allow outside air to enter? Is there enough insulation in the attic, basement, garage?

All of these things will help you to determine your utilities....and determine what you need to do to save money. I HIGHLY suggest that you get an inspection, because all of this information will be on the inspection report, and you can take it with you to get the seller to come down on the price.

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answers from Washington DC on

You can call your local power company and get an average bill for that house. Same thing with water etc.
Also, check the property taxes with the govt. agency that collects property taxes, they should be able to give you the last property tax bill.

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answers from Chicago on

Don't forget the bigger tax bill. You can plan on that going up every year.
Also, try living for a month on your new budget, see how it feels.

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answers from Dallas on

Good answers so far. Try to figure in if you are going from a one story to a two story. We went from a 2000 sq foot ranch to a 2700 sq foot, 2 story and the electric bill (AC is our biggest cost) doubled with only 700 sq foot added.

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answers from New York on

Here is the thing. It's not just utilities that are going to go up (although they will). You'll need more furniture, larger furniture and in general, more of everything. If you double the utility bill, you should be fine. I doubt it will be quite that much.

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answers from Oklahoma City on

When I was on the board of Habitat in my area we would work with many families trying to qualify. We put about 33% of their bring home into the house for mortgage, utilities, insurance, upkeep, repairs, and replacing used up items like vacuums and washer/dryer.

This works really well over all because it encases so many of the things we forget about when planning a budget. If you include what it takes to sit in the house and be warm/cool you aren't really covering all the costs.

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answers from San Francisco on

25% is still good. A lot of people are paying 50%, around here.

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answers from Albany on

With both houses I've sold the realtor had a standardized form for utility cost so prospective buyers would know. So you or your realtor can certainly request that info. I've found when you go look at a house on the market, that info is in the info packet you get.


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answers from Miami on

Make sure that you finish your own house renovations first. You had some problems with your foundation, and until you actually finish that work, you don't know how much money that will really cost.

Have you seen the show "Love It or List It"? Every time they go into the basement or foundation or even into the walls, it seems they find something that is a real problem that has to be fixed that they did NOT anticipate. And of course, it costs a bunch of money that the homeowners don't expect.

You can ask the realtor to find out what the utility bills regularly run in the house you are looking to buy. Pick February and July, LOL! They are certainly the best indication of worse case scenarios! Know what the property taxes cost and make sure that you plan for the taxes to go up.

It seems that no one sells a house on contingency anymore, so I hope thta you sell your house quickly (once you have the foundation problem fixed, do the cosmetic stuff and make the house shine.) It's a good time to put a house on the market so that people can get in before school starts!

Glad you've found a beautiful house!

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answers from Las Vegas on

Don't forget property taxes and insurance as there will be an increase in these yearly expenses as well!

You live in IL. I was born and raised in Northern Illinois, and my family still lives in the suburbs, so I know how high property taxes are. It will be easy to get that information, and that will be important in your calculations.

In addition to utilities and property taxes, you'll want to find out from your insurance company how much your home insurance will go up each year.

Good luck with everything!

1 mom found this helpful


answers from Pittsburgh on

Do your due diligence and ask the seller to see their past year's bills.

Although if you're still considering adding on to your existing home then I suppose this wouldn't work. I'm not sure where we left off :-)

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answers from Washington DC on


if the house is on the market? call the real estate agent and ask for utility bills. They will usually provide them.

If you double - you might be safe in "guessing" however they may have "energy star" appliances, updated windows, etc. You won't know until you ask.

Wait!! Weren't you just renovating your current home to your dream home?? If you want top dollar for your current home - you need to finish the renovations and you might not be as "house poor" as you think you will be.

You can also talk to your lender to make sure you will be approved for this "dream home" and make sure you have the 10% or more down.

If you can set the payment aside for this new home for 3 to 6 months without touching it? You can afford it.

Good luck!

1 mom found this helpful
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