Budgeting Tips for a Home Renovation

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From hiring contractors to drawing up plans and deciding on new fixtures and fittings, making home renovations can be very daunting. But it’s not all doom and gloom as you’ll be making huge improvements to your home that will add value to it should you ever decide to put it on the market. Minor and major renovations can be expensive so we’re going to shed light on some tips that will help you to budget for the project you’re about to undertake. 

Refinancing Options

Of course, there are home improvement loans available and all sorts of in-store cards that you can use to help provide 0% interest for X number of years – by which point you’ve probably already forgotten that you needed to start paying off the money to begin with. If you need extra financing, why not leverage the asset that you do own (your home) and apply for a home equity line of credit?  This way, you can use a portion of what you accumulated in the equity of your home to pay for renovations for upkeep and maintenance and that money will go back into the house once the credit is paid off. 

Budget Allocation

Are you unsure of how much you need to allocate to each room that’s undergoing renovation? A general rule of thumb is to spend 10-15% of the overall value of your home on a single room, with leeway to dial up and down depending on that room’s usage. This may mean that you need to spend $20,000 on the kitchen of a $100,000 property, but you may only need to spend $5,000 in the bathroom or a bedroom. Keeping this strategy in mind will ensure you stay on target with your budget. 

Use Trusted Contractors

This cannot be overstated, as there are plenty of questionable contractors out there. It’s always good to hire locally and be prepared to spend a little extra for the best-reviewed companies if you need to. Yes, it may cost you more upfront but you could end up saving yourself thousands of dollars down the line. As your neighbors what companies they’d recommend and make sure to check social media and local review sites for more info on the companies you’re thinking of hiring. 

Don’t Overspend

You’d be amazed at the amount of people that get totally carried away and spend 2X or even 5X their budget. Proper planning and following through on those plans are key here – it’s a simple concept but that’s all you have to do to stay within budget. When creating a plan, structural works take precedence. For example, ensuring that you have a fully functioning kitchen is more important than making sure you have the best entertainment center in the living room. 

Make a list of the rooms in your home that need renovating and create a shortlist of the upgrades that need to be done in each room. Do your homework and establish a rough estimate for each room and re-order the upgrades from most expensive to least expensive. Next, it’s time to determine your budget and see if you have enough funds to complete everything that’s on the list. If the figure falls short of what you need to have to do everything, start eliminated tasks based on price and urgency.