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You've saved up enough cash for down payment, and now you're ready to buy a new home. But have you thought about how much it'll cost to furnish your new place? A furniture budget should be paired with the budget you've created for the home purchase. After all, you don't want to wind up sleeping on the floor of your new home.
One rule of thumb is to spend 20% to 30% of your home's purchase price on furnishings. So, if your home costs $300,000 and you settle on 25% as the benchmark for your furniture budget, you'd be looking at spending $75,000 on furnishings. What you ultimately spend may differ greatly depending on your tastes, needs, willingness to shop around and ability to find deals. At any rate, furnishing a new home isn't cheap—follow these five tips to keep your furniture budget under control.
1. Review Your Budget Before You Buy
Before you buy a single piece of furniture, it's wise to figure out how much you can reasonably afford to spend on furnishing your new home. You can do this by checking your household budget or creating one if need be.
A household budget offers an overview of your income and expenses, and can help you figure out how much money you have available to set aside for home furnishings. You certainly want to avoid going into extreme debt to buy tables, beds, chairs, sofas and other items for your home.
Using cash savings to buy furniture will mean saving on interest charges that would result if you borrowed to pay for furniture. Depending on your timeline, you may be able to save up enough to furnish your entire home by the time you close the sale. Calculate your furniture costs and divide that by the number of months until your planned move-in date to figure out how much cash to send to your savings account every month.
2. Pay With a Credit Card
To cover the cost of home furnishings, you might consider paying with a credit card. If you go this route, you'll probably want to stick with a card that provides a low annual percentage rate (APR) or get a card with a 0% intro APR. Why? Because if you carry a balance from one month to the next, a low APR or 0% intro APR can reduce or eliminate interest charges.
Even better is a credit card that provides an attractive APR as well as the ability to earn rewards, such as travel miles or cash back. Additionally, you might consider opening a credit card account that provides a generous intro bonus. Again, you'll want to find a card that comes with a low APR or 0% APR if possible. One note of caution, however: It's important to wait until the mortgage approval process is completed before applying for a credit card or any other form of debt. The hard inquiry associated with the application and the appearance of a new credit account on your credit report has the potential to disrupt your loan approval.
As you're deciding whether to use a credit card to buy furniture, keep in mind that retail store credit cards often charge higher APRs than what you'd find with traditional credit cards. If you don't pay off your balance in full every month, you could wind up being saddled with more interest on the balance of a retail store credit card than with a traditional credit card.
3. Shop During Sale Seasons
Shopping during the right seasons is a great way to snag deals on furniture. Generally, furniture prices fall in late summer and late winter as stores prepare to stock new styles that arrive in the fall and spring. Here's a bargain-hunting rundown for specific types of furniture:
- Living room and dining room furniture: For this category, aim to buy items from January through April, when demand and prices tend to decrease.
- Mattresses: You'll often come across mattress bargains around major holidays, such as Thanksgiving, Presidents Day, Memorial Day and Labor Day. Cyber Monday, which falls on the Monday after Thanksgiving, might be a good time to score an online deal on mattresses too. You might even try shopping for mattresses between Christmas Day and New Year's Day or on Super Bowl Sunday, when fewer shoppers are out and about.
- Outdoor furniture: You can unearth some sweet deals on outdoor furniture between Independence Day and Labor Day. Steeper discounts may be available on outdoor merchandise that remains unsold after Labor Day.
- Office furniture: Need to furnish your new home office? If so, the ideal time to buy office furniture usually is around back-to-school time, when retailers slash prices on desks, office chairs and the like.
No matter the season, remember that some retailers offer year-round furniture bargains. They include Amazon, Bed Bath & Beyond, Birch Lane, Hayneedle, Home Depot, IKEA, Kohl's, Overstock, Target, Walmart, Wayfair and World Market.
4. Buy Used Furniture
In some cases, secondhand furniture may be practically as nice and functional as brand-new furniture—but without the hefty price tag. Here are some cost-conscious options for purchasing used furniture:
- Online marketplaces such as Craigslist, eBay, Etsy, Facebook Marketplace and OfferUp
- Furniture consignment shops
- Thrift stores
- Antique shops
- Flea markets
- Habitat for Humanity ReStore locations
- Goodwill retail stores
- Estate sales
- Garage sales
You might even ask relatives, friends or colleagues if they've got any furniture they'd be willing to part with—perhaps at little to no cost to you.
When making a major furniture purchase, a little bit of haggling may save you big as well. You might be able to talk your way into a lower price. But if you and the seller can't agree on a price, you may walk away to find a better deal elsewhere or return later and find that the seller is more eager to make a deal.
When you're shopping for used furniture, be sure to closely examine any piece you want to purchase, look carefully at tags and labels, and buy only what you need. Also, you may want to shy away from buying used mattresses or used upholstered furniture, as bugs and dirt may be lurking where it can't be seen by the naked eye.
5. Create a Registry
You've heard of wedding registries and baby registries. Well, don't overlook the ability to set up a housewarming registry you can use to ask relatives, friends and colleagues to buy furnishings you've picked out for your new place. You might even be able to collect discounts—such as 15% at Crate & Barrel or 20% at Bed Bath & Beyond—when you sign up for a housewarming registry.
The Bottom Line
Furnishing a new home can be a pricey proposition. If you settle on buying furniture with a credit card or loan, you might check out Experian CreditMatch™ to be paired with personalized credit offers. A move like this might even help you get your new home furnished on the double.