How to Responsibly Budget A Home Renovation Project
One of the joys of homeownership is the power to makeover your domain. It can also be one of the biggest stressors. Americans will spend an estimated $340 billion on home improvement projects this year, according to a report from Harvard University’s Joint Center for Housing Studies. With all the time and money that goes into remodeling, homeowners should be sure they are not exceeding their means or making unnecessary changes. Here are some tips for creating a renovation budget you can stick with that won’t break the bank.
Outline Your Project Goals
Before you get started calling contractors and buying materials, make a detailed renovation plan. What are you remodeling and why? This is a good time to reflect on what changes really need to be made and prioritize accordingly. While some changes will both add value to your home and bring personal happiness, others may be costly, nerve-wracking and ultimately unnecessary.
Talk to Local Experts
After you have come up with your remodeling wish list, it is time to get expert opinions on estimates and potential problems. A short list of people you may want to meet with: realtors, home inspectors, contractors and architects. Together, they can give you a picture of what kind of return on investment you will see, what your key obstacles may be and how much the entire venture will cost.
Crunch the Numbers
You know what you want to do and have an idea of the overall cost. It is time to create an itemized budget. This will include fees for contractors and permits as well as the cost of materials and equipment. You can get things down to exact numbers by picking out precisely what stores and products you want in advance. You may find it cheaper to shop local rather than order online due to lower risk of receiving damaged goods.
Be Open to Adjustments
Just like with your regular monthly budget, you should continue to track your expenses as your project gets underway. You may find you are under or over budget in certain areas. You are almost certain to encounter unexpected expenses and delays as well. This is the nature of home renovation. With that in mind, make sure you have room in your budget for emergencies and surprise costs. The experts you talk to should be able to give you an idea of how much to set aside.