How to Budget for Home Remodeling

How to Budget for Home Remodeling

Home remodeling projects always begin with the best intentions but many a times it ends up burning a hole in your pocket, and leaving you distressed. Before you start your next project, cut down on your expenses by careful planning and by being creative with your budget. The process of creating a budget is an important first-step. It starts long before you start figuring out the materials and labor required.

Before you begin, it is important to know your reasons for remodeling. Is it to accommodate a new family member? Or is to increase the value of your home? Or are you looking to set up a home office? If there is no further reason than to getting a different look, you can do with some redecorating instead of opting for a complete remodeling of your home.

Once you are clear about why you want to remodel, the next step is to determine how much you can afford to spend. Most people skip this – they just call a contractor and expect them to make a budget for them; this is not the best approach. Check your savings – do you have enough money to finance your project or would you need external financing? Would you have enough money every month to pay back a loan or mortgage that you might have to take?

Another crucial question – How long do you plan to stay in your home? This will influence how much money you should invest in your project. If you are planning to relocate in the future, you need not spend a lot. However, if you are planning to stay for 10 years or more, you can spend more money.

The next step is to visit several home improvement stores and find out what all you would need for your project. Write down the cost of each so that when you sit with your budget, you would have the figures ready.

You must consider the financial resources of your family and your life commitments before you plan a renovation. Renovations can be divided into two categories – needs and wants. Find out your motive for your project and check if you can afford it.

One important decision you will need to make before you go ahead with your budget is to decide whether you would want to hire a professional contractor or do-it-yourself. While there are several advantages of hiring an expert – good knowledge and experience, you can consider doing it yourself too.

Once you have decided on this, you are ready to plan your detailed budget. Write down the following categories in your budget – Labor costs (if you are hiring professionals), Tools (if it is a DIY), Permits, Materials and Cleanup, and plan accordingly.

 

The reality of home remodeling is that it will take longer and often be more expensive that what you calculate. Therefore, make provision for unforeseen circumstances and costs in your budget to be more realistic. Whatever your budget figure, it is a good idea to add up to 20 to 30 percent more to handle unexpected costs.

A thoroughly planned budget is half the battle won. Get clear about your remodeling budget and spruce up your home without breaking the bank.