How to Furnish Your New Home on a Budget

Congratulations! After going through the long process of finding and purchasing a house — and signing your name seemingly hundreds of times on all that closing paperwork — you are now the proud owner of a house you can call your very own.

Now that you have the keys to your new place, you are chomping at the bit to transform your house into a home. Of course, after plunking down a great deal of money for a down payment and closing costs, you are not exactly swimming in spare money, so you'll have to keep your budget in mind when decorating your house.

No worries, intrepid new homeowner — with a combination of financial smarts, knowing what you need and what you can pass on, and determination, it is more than possible to have a beautiful new home without breaking the bank. Use this guide to maximize your furnishing budget.

Make an Inventory of Your Furniture and Your Belongings

The best place to start when furnishing a new home is by taking an honest look at what you already have and making a detailed inventory list. Evaluate each piece of furniture and put it into one of three categories: keep, unsure, and donate/discard. Once you have everything sorted on paper, take a look at the first two categories and decide where everything will go in your new home; this should help you determine if you can use an item or if it should be donated.

Creating this inventory has additional benefits. In addition to helping you decide what you need and what you can purge, the list is helpful to have on hand should you ever need it for making a claim on your homeowner’s insurance policy. To stay organized, take digital photos of what you own and also jot down serial numbers of your electronic items.

Prioritize Which Items You Need First

While decorating your new home will be an ongoing process you can enjoy over time, to get settled as quickly as possible, you will need some basic items. These include a place to sleep, a place to sit, and a place to put things on. If your current mattress is on the old side, consider upgrading to a new mattress, and if you can, a decorative bed frame to go with it. A comfy couch, a coffee table, and a number of lamps are also essential items that every house needs to become a home. If you are an avid movie watcher, upgrading your television may be on your priority list as well.

Just keep in mind that furniture costs can add up. So if you don’t feel like you need to upgrade items right now, you can always save for a few months and purchase new items down the line. Instead, put some money you may spend upgrading items you already have toward purchasing furniture you don’t have, like the dining table that wouldn’t fit in the tiny apartment you previously lived in or outdoor seating for your new patio.

Create a Budget

Once you determine what you have and what you need, it’s time to create a budget that will help bring your interior decorating dreams into reality. While some experts suggest spending between 10% to 50% percent of the price you paid for the house on furniture, this might be out of reach for many people.

Instead, use your checking and savings accounts as a guide to determine what your monthly expenses will be in your new home. Include expenses like your home loan, insurance, taxes, food, and utilities. Multiply this number by three to give you an idea of what you should have on hand for savings. Whatever you have above this amount is what you can spend on furniture for the first round of shopping.

In other words, if your monthly expenses will be about $5,000, your three-month savings goal should be $15,000. Any money you have on top of this can be spent right away on furniture.

Buy It Cheap or Secondhand

Thanks to online classifieds like Craigslist, consignment shops, garage sales and flea markets, and thrift stores like Goodwill, it is quite possible to get some really nice new-to-you items that will help you save money. Once you change your address through the U.S. Postal Service, you will probably also get inundated with coupons from a number of big-box retailers; this can be another great way to furnish your home at bargain prices.

Also, furniture shops typically hold great sales during a number of holiday weekends. If your move will coincide with Presidents’ Day or Martin Luther King Jr. Day, chances are good you’ll score some great deals at local stores. The same is true at the end of seasons, when retailers are clearing out old inventory to make way for new things.

Don’t be afraid to ask friends or family if they are getting rid of any furniture or know anyone who is. You may even be able to score some stuff for free! But what happens if the couch you were offered isn’t exactly your taste? Don’t worry, you can always upgrade later on. If you are really strapped for cash, getting secondhand furniture from people you trust can be a great alternative. This allows you to have the furniture you need in your home without breaking the bank right away.

Enjoy Your New Home and Shopping For Furnishings

You should be commended for wanting to furnish your new home in a budget-friendly way. Fortunately, it is quite possible to have a nicely appointed home without spending a ton of money. Remember, you don’t have to purchase all of your furniture immediately when you move. If you need to space purchases out over time, do what is best for your financial situation.


In addition to setting aside some funds for your new home, speaking with a financial advisor may also be the next step in your home journey. Owning a home can take a hit on your finances, so speaking with a professional about how to afford your home while also saving for life events such as retirement or your kid’s college savings can help ease financial stress.

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The material presented here is for educational purposes only, and is not intended to be used as financial, investment, or legal advice.