For many of us, our homes are our biggest assets. As such, these spaces require plenty of TLC, whether in the form of maintenance or upgrades. And more often than not, these projects come with a hefty price tag.
According to a survey of home renovations in the top 50 U.S. metro cities, people spend an average of $13,000 per renovation project. A whopping 83 percent of these expenses are paid for in cash, too. It makes sense: Experts never recommend spending funds you don’t have, particularly the large amounts something like a renovation requires.
But where do people come up with these funds when they have day-to-day expenses to take care of? Careful budgeting, of course.
Whether you’re planning a massive project like a multi-room addition, a simple one like carpeting a basement, or finding a happy medium rehabbing a bathroom or a kitchen, these budgeting tips will help ensure you have the available funds.
Pick the right project
Some home improvements are born out of necessity—like when the hot water heater bites the dust or the roof starts leaking. But if you’re thinking about what projects you may want to take on, consider those that will add the most value to your home. According to a recent study, there are six projects that deliver the highest returns in terms of resale value: garage door replacement, manufactured stone veneer, miner kitchen remodels, fiber-cement siding, vinyl windows, and vinyl siding.
Come up with a ballpark number
Once you narrow in on a project, you’ll want to begin to familiarize yourself with what things cost. While hard numbers will depend on your geographic region, your aesthetic, and the professional you choose to work with, a little research can lead you to ballpark ranges that will help you plan. Check out Remodeling Magazine’s interactive tool for help.
Is the ballpark figure within the realm of possibility? Now it’s time to get really specific. Finishes—aka the materials you choose to outfit your space with—are the real budget busters. Think about what kind of aesthetic you’re going for. Do you want real hardwood floors or are engineered floors or even carpets an option? The more specific you can get, the better a contractor can help you hone in on an accurate budget.
Get a quote, not an estimate
Getting an estimate from a contractor is not the same as getting a quote. Though estimates are very common, they are surface level approximations. Quotes, on the other hand, are much more specific and outline the project’s costs and the timeline for the job. Because quotes take hours to prepare, a growing number of contractors will only offer estimates—unless you secure a pre-construction contract with them.
Make sure to have a little extra cash on hand
You know what they say: Even the best laid plans are susceptible to spontaneous combustion. And when it comes to remodeling, it pays to have extra funds on hand. In 2019, almost 31 percent of renovating homeowners on Houzz went over budget. Even more alarming? Only 3 percent reported coming in below budget.
Find ways to save
There’s a bit of good news though: You can always find ways to save, so even if you do go over budget, it won’t sting quite as much. Are there any big holiday sales coming up? Take advantage of these savings events. And don’t forget: If you have a good track record with credit cards, many appliance and big box hardware stores have zero interest credit cards. This can be a great way to pay for a few items, since you’ll make more frequent, inexpensive payments rather than one lump sum.
You can also take on some of the more reasonable work yourself—think painting or any post-construction cleanup. Of course, you should never try to DIY something complex, like tiling, if you don’t have the skills, since doing something twice can be much more costly than just paying a professional the first time around.