Unfortunately, there’s no real financial guide to life. Fortunately, Rachel Cruze and George Kamel, hosts of the “Smart Money Happy Hour” podcast, are here to help. The duo recently discussed some surprising financial realities of adulthood.
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Here are seven key points they want adults to be prepared for. Also see seven bad habits you probably learned long ago.
Property Taxes Never End
Even after you pay off your house, you still have to pay property taxes. As Cruze pointed out, “You pay off your house and then you still have to pay property tax. If you don’t pay that, they take your house away.”
This ongoing expense can be a shock to new homeowners who thought they’d be free and clear after paying off their mortgage.
Also See: Trump Wants To Eliminate Income Taxes — 3 Items That Will Instantly Get More Expensive
Home Maintenance Costs Add Up
Kamel mentioned that the average annual cost to maintain a single-family home is about $6,663, according to a recent study. This includes things like yard work, air conditioning maintenance, pest control and trash service. These costs can sneak up on new homeowners who aren’t prepared for the ongoing expenses of owning a home.
Tax Refunds Aren’t Always Guaranteed
As a kid, you might think everyone gets a tax refund every year. But as an adult, you might end up owing money instead. Cruze and Hamel agreed that it’s actually better to owe a little bit (as long as you can afford it) rather than get a big refund, because it means you haven’t been lending the government your money interest-free all year.
Cell Phone Bills Can Be Expensive
Kamel said the average wireless bill in America is $141 a month, which adds up to $1,700 a year. This can be a big shock when you move off your parents’ plan and start paying for your own phone service.
Car Ownership Costs More Than Just the Purchase Price
It’s not enough to just afford the car itself. You also need to budget for insurance and gas. Kamel said the national average for car insurance is now $2,150 per year. Plus, you need to factor in the cost of gas, which can vary a lot depending on where you live and how much you drive.
Health Insurance Doesn’t Cover Everything
Even with health insurance, you probably have to pay something for doctor visits, prescriptions and other medical expenses. Cruze and Kamel said they’ve both been guilty of putting off doctor appointments to avoid these costs. However, they stressed the importance of regular checkups and having a well-funded HSA (health savings account) to help cover medical expenses.
Retirement Savings Require Discipline
On the podcast, Cruze related a story about a time when she really wanted to skip a year of retirement contributions so she could go on a nice vacation. However, she decided to stick to her savings plan instead. The point: Be consistent and stick to your plan.
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This article originally appeared on GOBankingRates.com: Rachel Cruze and George Kamel: 7 Financial Realities Adults Need To Be Prepared For
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