The beginning of a new year singles the opportunity to get a mulligan on life, if you will.

People love making resolutions: sadly most personal goals are never reached.


Because, people always tend to think and talk about setting personal goals prior to the new year, but rarely do they act on it.

Life gets to busy to exercise.

Eating healthy is not convenient in a fast food world.

And, the list goes on and on.

Fortunately, if your goals are financial in nature you can leverage your home to your advantage.

Whether you are looking to pay off some debt, build up your savings account, better manage your daily spending, or prepare for your retirement.

These are good monetary goals to have, but, do you have a plan to achieve them?

If you have not developed a plan here are some ideas, as there is still plenty of time to figure things out in 2016.

Smart Way’s Homeowners Insure Their Future

If you’re a homeowner or intend to become one this year, your house is one of the greatest leverage tools you have to help you achieve the financial goals you have for yourself. We have put together the best information we could find to help you out this year.

Tip #1: Get Ready For Taxes

The first thing a homeowner should be preparing as the calendar turns over into a new year are taxes:

While taxes can be a bit of a burden, by getting started with some early prep work, you can save yourself time and minimize the stress of looking for documents that are hiding right in front of you as the tax deadline approaches.

Image Credit: Comfort Mortgage

Image Credit: Compass Mortgage

According to David Crowell, co-Owner of Vectar Onsite CPA’s:

“You want to keep all your file together. I recommend creating a folder with as many of the following items you have available. By doing so, tax time will be a less stressful experience”.

Some things to get started on easily include:

  • 1098 statement – showing mortgage interest paid:
    This statement will most likely not be available until February’s deadline, but you can log in to your mortgage provider’s website to get a good idea where to find it once it is available.
  • Property tax records:
    These records include any documentation you have proving taxes have been paid on land and/or property you own, which is not used for business purposes.
  • Insurance records:
    Hopefully, you did not experience any major property damaged during 2015, however, if you did you will want to make sure you have a complete ledger that shows the value of your personal property before and after the casualty, as well as, information related to the amount of money submitted to your insurance as a claimed that was applied towards remedying the loss.
  • Receipts for home office expenses:
    If you work from home, you can deduct a portion of your mortgage payment, internet bill, electrical bill, office item purchases, etc. However, do not try to double dip.

For example, if the office items you purchased were reimbursed to you by the business, you cannot count it again separately. Mr Crowell recommends you prepare an organized Excel spreadsheet and gather all of your receipts to make the deduction process easy at tax time.

  • Know your credit eligibility:
    There are improvements you made to your home that also support government incentives, as a result you might have extra money coming back to you.

For example, according to Compass Mortgage – “For the last several years, homeowners who purchased their residence in 2007 or later have been enjoying the deduction of private mortgage insurance premiums. That tax deduction was set to expire in 2014, but thanks to last-minute changes by Congress and the president with the Tax Increase Prevention Act, the private mortgage insurance deduction has been retroactively extended for 2015 and will continue for 2016″. You can learn more about the PMI Credit extension here.

Another example is the Michigan Home Heating Credit, here is a checklist to see if you qualify. On the latter note, let us move on to the next advantage homeowners have.

Tip #2: Save Money On Home Energy Cost

If you are a Michigan homeowner, odds are you are tired of giving over 15% of your after-tax dollars to the utility company.

While gasoline prices at the pump have declined substantially in recent months, home utility cost in Michigan appear to be on the raise.

According to the Department of Energy, the price of residential electricity in Michigan is 42% above its level in 2005 measured in real, inflation-adjusted terms. Even more shocking is that the price of residential electricity has increased by 73% since 2005 in current prices.

Michigan Home Energy CostA report by the American Coalition for Clean Coal Electricity states:

Michigan households with pre-tax annual incomes below $50,000, representing 52% of Michigan’s population, spend an estimated average of 17% of their after-tax income on residential and transportation energy.

Electricity cost impact on Michigan

As a homeowner, you have little control over prices, but you can control your spending on energy. Here are some ideas on how to do this today.

Plug Those Duct Holes

Brent Zebell, co-owner of Five Diamonds Heating and Cooling suggests, “you want to manage your energy loss. And, your ducts are one of the biggest culprits.”

In a recent HouseLogic’s article, John Riha the executive editor of Better Homes and Gardens magazine agreed stating,

“a good place to start is your HVAC ductwork. Ducts are notorious energy-wasters, leaking your heating and cooling air through holes and loose connections.”

A simple whole house duct cleaning can improve the flow of cool and warm air, reveal damaged, loose, or missing ductwork, and ultimately save you money.

Ductless energy for Michigan homeowners

Mr. Zebell also recommended going “ductless” as there are many incentives within the Michiana region to do so.

Alternative Energy Answers

Another, solutions is to consider residential wind and solar technology. \

According to Betsy Salyer, Office Manager at Solar Energy Systems, LLc, “Solar panels typically last around 40 years, one quality panel averages $1000, and most homes require 4 – 10 panels just to get started.”

While the initial cost of a whole house solar system might seems daunting to many homeowners, the long-term savings and the short-term credits typically allows the homeowner to have 27 years of very little to zero utility cost, because as Ms. Salyer explains — “the energy cost savings of Solar in the Michiana region results in 13 years of breakeven pay-back”.

Of course, you want to check with our home insurance agency to see how the could impact of insurance premium.

LED bulbs last a phenomenal 20,000 to 50,000 hours between changes, or about 18 to 46 years when used for 3 hours each day. Although the initial cost is high (about $40 per bulb), LED bulbs pay for themselves in energy savings in about 10 years.

Tip #5 – Actively read about ways to improve your home value, safety, and aesthetics

Amanda Gray recently wrote an article on Kathy Papola’s Fine Home Network, highlighting 5 must read homeowners blogs.

Tips#4 – Double check your insurance policy and coverages

Policies are usually issued on an annual basis, so check the status of your homeowners insurance and make sure you’re set up for coverage in 2016. The end of the year is also great time to test the batteries in all your smoke alarms and carbon dioxide detectors and replace any that are dead.