How to Stay on Budget with a Home Renovation
So you've got your home and your mortgage and then one day you look around and realize you want to renovate but you don't have much to spend. What to do? I'm a total newbie to home renovation, but having spent a fair amount of time watching HGTV, I get the basic gist of the process. You have a dumpy room, you gather the money, hire a contract, and watch the sha-zam magic happen.
As it turns out, there is a great deal more to it than that. A lot goes into renovating a home and it all revolves around that special word: money.
Budgets can not only make or break a renovation experience, but also affect the way you feel about your home. It's critical to stay on track, and also to invest wisely, which can sometimes seem in conflict with one another during a home renovation, so I have a few tips I've gathered from my own lessons on how to stay on budget with your next home renovation.
Make Your List, Then Live With It—When you renovating a home you should first sit down and make-up a list of all the work you'd like to have done. Go crazy! Then once your "wish list" list is complete, it is time to narrow down the options to what you'd like to have done juxtapose with what you can accomplish on your budget. Then, in my opinion, comes the next and most crucial step: live with your list for about a week or so. Sleep on it, and then sleep on it some more. I can guarantee your priorities will change once you have some time to really think and imagine yourself in the new space.
Create the Budget and Stick to It—I don't know why it is that people I know always blow through their renovation budgets. Perhaps it is the amount of work, effort, and discomfort involved in a renovation that makes people want to just "get it over with" or "do it all at once." Many often feel, "Well if you are already there working on such-and-such you might as well do this…." Because most of the time people don't want to take on the extra work, or they fear future projects will mess up any finishes on current renovations.
This is why it is crucial to get the budget right from the outset, so you can resist the urge to splurge and also plan all your renovations around which would be most economical to do first.
Comparison shopping is acceptable—If you are working with a contractor, you will need to buy your materials through them, just as standard best practice, and also because they are privy to a lot of deals us regular joes can't get. This doesn't mean that you should accept your contactor's price as bottom line. Do your homework, and if something seems way overpriced (countertops are often the biggest mark-up), send the contractor some of the estimates you found. Even though they are handling the project for you, it is your project, your home, and your dollar.
Don't be afraid to buy used—If you can snap a picture of it, you can sell it online. Many homeowners sell gently used appliances, cabinets, windows, even doors online and for a fraction of what they'd cost new. If this sort of thing doesn't bother you, it can be a great way to knock off 10-15% in some areas of the renovation.
Hire the right people the first time—Unless you are a true weekend warrior or DIY guru, leave the big work on the house to the professionals. Otherwise you are just going to waste your time and your money by having to hire someone and purchase materials again. Some things, with proper research and practice, can be done by a layman, but be honest with yourself. Are you really going to read that book on laying tile when you get home from work at night? Some people will, some people won't.
Be honest with yourself and don't take on more than you can handle.
Have an Emergency Fund—Just like in life you are going to need a contingency fund in case the unexpected happens. When figuring out your initial renovation budget, if you go ahead and lump 10% overage in, you'll be more likely to stay on budget.
Lauren Bowling is a personal finance writer at ReadyForZero, a website that helps people get out of debt faster on their own. She enjoys writing about all things finance, relationships, and self-esteem. You can follow @ReadyForZero and @Lbeemoneytree on Twitter.
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