Finally, it is time for your first home renovation project. You have a general idea of what it is going to be and how long it is going to take. But, how much money should you spend on a home renovation?
Creating a budget isn’t easy, and it shouldn’t be too difficult as some people may think. That being said, you should never renovate your home without a budget plan. Because as the renovation is happening, you may want to remodel the kitchen, replace the window frames, fix some things here and there, and suddenly, your expenses are going through the roof.
Don’t worry, in this article, we’re going to learn how to create a budget plan for a home renovation. So you won’t go overboard and still be able to get what you want.
How much should you spend?
The general idea is to not go crazy and spend half the value of your home to renovate a room or two. The key here is finding the balance of value and expenses by looking at your current monthly budget and start from there.
Take a look at your household income and the value of your home. Then calculate how much is 60-70% of your household income and spend that to renovate a few rooms. If it’s too difficult, you can start saving money for a year and then start the renovation then. Make sure these renovations are meaningful and needed.
Choose your financing
This brings us to another important topic: financing. Before setting the budget, choose how you want to finance the project. It can be by paying in cash, taking out a loan, or applying for credit. Every financing option has its own pros and cons, so choose carefully.
After estimating how much you need to spend, you still need extra cash — probably 10-20% of your available funds – for emergencies. Because if something goes wrong and you don’t have extra cash, the whole project can go up in smoke.
Get quotes from contractors
Before continuing with a project, make sure you can get an exact quote from every contractor you are in contact with. Explain to them exactly what you want, from every small repair to the biggest remodel. So if it’s the kitchen you want, let them know if you want a certain type of faucet or countertop material. Don’t leave anything behind because you need to know the exact quote, so you can make a better decision later.
I recommend contacting at least three different contractors. They can be friends, neighbors, or people you can trust. Give them the same plan project description and specific products lists.
Generally, you are looking for the right contractor based on their references, experience, and peer reviews that you can get online. It is also a good idea to request an itemized bid to make it easier for you to compare each contractor.
Set your priorities straight
Going overboard with a project is actually very common when it comes to home renovations. That’s why you need a priority list to make sure you’re on track. This is especially important when you notice that what you want isn’t aligned with your budget. It’s okay to scale down the project to comply with the budget, and I am sure you can still be happy with the result.
When you need to cut your project short, however, please consult your contractor first. Ask for suggestions on which things can and cannot be cut. Let them know your current budget as well to speed things up.
There may be additional compromises that you can do to stick to your budget. For example, delaying appliances and lighting fixtures upgrades for later, opting for laminate countertops instead of granite, and make the bathroom smaller by 10-20 square feet.
Home renovation projects are always exciting and challenging, especially if this is your first time. Never ever rush the project or everything can go wrong, and you’ll end up just wasting your money away. Plan your next step carefully, and your contractor is your ally at making sure everything is according to your preferences.