How to Budget for Home Renovations

by | Jun 28, 2019

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Are you ready to give yourself that open concept floor plan you’ve always dreamed of?

Or maybe it’s a master bath renovation you've pinned over and over again?

Either way, you’re ready for a home renovation— but where to start?

Creating a budget for home renovations is a great place to start and will help you save money and have a successful renovation in the long-run, and less stress too.

Budget for Home Renovations 2 » Life with Anna C

 

Tips on How to Budget for Home Renovations

Prioritize Your Remodel Needs

This is extremely important when budgeting for your remodel.  First, you should make a list of everything that you would like to make changes to. This will help you get a general idea of how much work you actually need to complete. It’s a good idea to separate your list into needs and wants so that you can decide what is crucial to fix versus what can wait.

A great question to ask yourself is, “what do I want out of the project?” This can be a variety of things, whether it's updating, a return investment, or you just want a fresh change in your home. Establishing this will make it easier for you to set limits on the remodel, as well as make sure you’re spending money on the right projects.

One of the most important aspects of your remodel is knowing is where are you willing to splurge versus where you're willing to compromise. This will come in handy when you’re developing a budget and will help you stick to it. A great tip to help you decide which is worth spending more on is to consider the resale value of projects. Spending the extra money on certain projects of your remodel can prove to be an excellent return investment on your home. Some of the most money worthy home projects include (but are not limited to) new garage doors, kitchen remodels, wood deck additions, and new siding.

Create a Remodel Plan

Once you establish a list of your remodeling needs, it is important to then create a plan complete with estimates. You should make note of every detail down to the fixtures, furniture, paint, and hardware needed for each room. It’s also important to include appliances in your remodeling plan. New appliances come with the cost of the initial purchase as well as delivery and installation fees, so it's crucial to note how that could potentially affect your budget. By making a list of everything you want or need for each project, it allows you to calculate the cost and see how it aligns with your budget. If you prefer using technology, mobile apps like HomeZada make it easy to manage your home improvement project details and budget. They also store financial records, which you can use if you decide to sell your home down the line.

Make sure to speak with contractors about your remodel to receive professional advice. Connecting with top-rated electricians or plumbers in your area is smart if you want to accurately assess the cost and needs of your project. By bringing in two or three professionals, you will have a thorough idea of the project and how it will be completed, with the security of knowing the job will be done right.

DIY as Much as You Can

Who doesn't love a good do-it-yourself project? There's nothing a fresh coat of paint cant fix and DIY projects are a great way to give something a temporary facelift. This will allow you to utilize your budget for jobs that require professionals as well as save money for new projects in the future.

Some easy DIY projects for your remodel are:

      • Paint walls
      • Upcycle old furniture
      • Painting cabinets
      • Replacing hardware
      • Paint tiles

Assess Your Budget Options

Once you’ve estimated how much your remodel will cost, you need to decide on a financing option. A few options you should consider are refinancing, cash-out refinance, HELOC (home equity line of credit), or a home equity loan. These are all big decisions and it can be tough to decide which is right for you, so it is important to research different ways to pay for your remodel.

If you’re planning for a future remodel, you can help to avoid debt and additional credit lines by establishing a separate savings account. Some online banks offer great automatic savings account options that help you save money while you spend creating a return investment on your projects. This can prove to be beneficial because it's easily accessible and a way to manage your spending in real time.

Don’t forget to leave room for hidden costs in your budget. If you establish a max budget for your renovation without a cushion for issues hidden beneath the surface, you could find yourself going over budget or sacrificing a feature that you really wanted. A great tip is to factor in 10 to 20 percent (or more) of your budget to protect yourself from any potential issues.

Budget for Home Renovations 1 » Life with Anna C

Stick to the Plan

As you watch your project unfold, it may be tempting to add in small projects or finishing touches you didn’t think of in the beginning. Keep in mind that you created a budget for a reason and it’s important that you stick to it. Additionally, with every time you change your mind, it tacks onto the cost, work, and timeline of your remodel.

Your budget for home renovations is designed to help you create your dream project without breaking the bank. Renovation projects are fun and exciting but can take various amounts of time depending on the amount of work needing to be done. Remember to stay patient and don’t get discouraged if there are bumps along the way. But by using these tips, you will have a successful remodel you’ll love without leaving a hole in your pocket.

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