HomeLIFESTYLESHOME IMPROVEMENT7 Tips for Creating Your Home Renovation Budget

7 Tips for Creating Your Home Renovation Budget

Did you know that 63.5% of households own their homes? Homeownership isn’t always glamorous. When it comes time for repairs or improvements, you’re in charge of all the expenses.

That’s why creating a reasonable budget is essential if you’re planning a home renovation project. Unfortunately, creating a reasonable home renovation budget can be easier said than done.

That’s why we made this guide. In it, we’ll be breaking down seven tips for creating a home renovation budget that you can stick with.

That way, you can enjoy home improvements without breaking the bank. Let’s get started!

1. Prioritize Certain Projects

It’s important not to bite off more than you can chew with your home renovation project. So, prioritize certain projects over others.

Do your renovations one room at a time unless you don’t mind having your whole house taken over by the construction. In terms of prioritization, your first factor should be for rooms that are causing your trouble.

For example, maybe a bathroom has spotty plumbing. Or a kitchen has seriously outdated appliances. These projects should be your first concern.

However, if every room in your house is functional, you should consider focusing on renovations that will add value to your home. For example, things like new roofing, new wood flooring, or kitchen renovations can all add a lot of value if you ever decide to sell your home.

However, at the end of the day, you should choose renovation projects that are going to make you happy.

2. Make a Rough Estimate of Costs

Next, it’s time to start doing some math. Break out your calculator and start doing research. See what the average prices are for the renovation project you want to take on.

Be as thorough as you can in terms of what you’ll be renovating. Start writing out figures to see how much money you can put toward the project. Remember that at this stage, these figures are just estimates.

You won’t be able to get an actual price on the job until you discuss it with your contractor. And even then, the final price can still be subject to change.

3. Always Leave Wiggle Room in Your Budget

You should never calculate your budget down to the dollar. Why? Because home renovation budgets are notoriously slippery. Even with an estimate, there’s no guarantee that you won’t encounter unexpected problems with the project.

These can cause delays or, worse, require you to rethink the entire renovation.

As such, you should always leave a little wiggle room in your budget for these potential roadblocks. We recommend between 10% to 20% of your renovation budget.

4. Shop Around For Contractors

Next, it’s time to find a contractor. First, you should ensure that any contractors you meet with are insured and licensed. Schedule a consultation and ask for an estimate.

Do this with two to three contractors and compare their bids. Some contractors will require an upfront payment, while others will provide more flexible payment plans.

Obviously, it’s good to save money, but you shouldn’t let this be the only factor when choosing home improvement options.

If you do, it’s possible you’ll be stuck with a contractor that takes long lunch breaks and leaves the job unfinished.

So, go with the person that offers the most thorough evaluation of your renovation while still charging a reasonable price.

5. Work In Taxes and Other Fees

This ties in with the wiggle room, but you should always leave some money to account for taxes and other unexpected fees. For example, maybe you want a marble countertop for your new kitchen.

But marble isn’t available locally where you live. So you will need to ship it. You accounted for the cost of the marble. But, the process of shipping adds thousands of dollars in expenses to your budget.

So, if you plan on ordering material or pieces from other states or countries, you need to factor in the cost of shipping. Or else you’ll be dealing with a lot of unexpected costs.

6. Consider a Home Improvement Loan

Home improvement projects can range in cost from a few hundred dollars to a hundred thousand dollars projects. If your renovation is turning out to be more expensive than you predicted, you might want to consider home financing.

These are either personal loans or home equity loans that can be used toward major repairs or renovations. In some cases, you can even receive government grants or tax write-offs for installing energy-efficient improvements to your home.

So, it’s worth doing your research to find out if they’re right for you. If you want to learn about them, then you can read more here.

7. Be Upfront With Your Team About Your Budget

If you’re like most people, you don’t have endless amounts of money to spend on your home renovation budget. Unfortunately, contractors can sometimes seem unaware of this.

Often they’ll recommend changes or encounter obstacles that require them to charge a lot more. To avoid running into these awkward exchanges, you should make sure to be as upfront about your budget as possible.

By being firm with what you can and can’t afford, you can make sure that the project stays as on track as possible.

Appreciate Learning How to Create a Home Renovation Budget? Keep Exploring

We hope this guide helped you learn more about creating a home renovation budget. As you can see, the most important thing when crafting a budget is research.

This is especially important if you’re working with a limited budget. If you just dive into the renovation, you’re likely going to spend a lot more than you intend to.

So, put some time into crafting a budget, and you’ll be much more likely to save money. Want more content like this one? If so, you should keep scrolling through our website to find dozens of similar topics.

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