Sticking to a budget is never fun, but when you want to do a home improvement project it’s essential. Knowing exactly how much money you have to spend, establishing a limit and sticking to it will ensure your project doesn’t cause you stress and won’t break the bank. Here are some ideas to help you create a budget for any
Set a Goal
What you decide to renovate will impact your costs. It’s important to know your goal before you can crunch numbers. First, ask yourself what you want to do? Do you want a place to entertain guests? Do you want to make the basement into a workout area? If you are finishing your basement, do you want to make it easier to store materials? The answers to questions like these will help guide your project.
Reduce Your Costs
You can save a few bucks by tackling small parts of a home improvement project yourself. There are a variety of ways to reduce labor costs, like ripping out carpeting in your living room, or removing tile from a bathroom. When you decide to hire a contractor, you can also save you a few bucks by choosing a less busy time to hire. Most renovation jobs are done in spring and summer, so look to commission work in the fall or winter.
Ask Contractors for Quotes
If you want to be as precise with your budget as possible, ask for a “hard” quote for your renovation project from a contractor. Most contractors offer free estimates, but a firm quote will cost you some money. The cost should include an outline of the costs and the timeline to complete the job. If you’re comfortable with the contractor and the price, and you want to stay on budget, consider signing a fixed-price contract. This agreement means you’d pay a set amount for the project up front. Another option is a time-and-materials contract. This is an agreement to pay the contractor based on the time spent to perform the work, and for any materials needed.
There are many options to consider when it comes to borrow money for home renovations. You should consider: 0% interest credit cards, Home Equity Loans (HEL), Equity Line of Credit (HELOC), Personal or Unsecured Loans and Construction Loans. Find out more about potential financing in our feature from last year, Options for Financing Your Home Improvement Project.
Budget with Apps
A good app will help you organize every element of your project budget, and allow you to sync your computer and your mobile devices. Try an app like Mint.com, which will let you track spending and savings, and make it easy for you to you redirect money where you want.
Pad Your Budget
It’s a good idea to budget an additional 10 percent to cover unexpected expenses because you never know what will happen with a remodeling project once the walls start coming down. If you don’t spend the extra money, you can put it toward another home improvement project, or just add it to your savings.