Keeping home renovations on budget isn’t always easy. In fact, it can be a real challenge. Home renovations often require hefty investments, and the last thing you want is for the final price tag to be higher than your contractor’s initial proposal. Without adequate preparation, protecting your bottom line can be a steep task. Here are 4 ways to make sure you don’t blow your budget during a renovation.
1. Plan Out Every Renovation Detail Before You Start
One of the easiest ways to go over budget with a renovation? Not having a proper plan. Carefully planning out your budget not only protects your bottom line, but helps you figure out where to invest your money. Consider both your personal preferences and the return on investment (ROI) on details such as appliances, hardware, removing walls or adding beams. These decisions can be motivated by how you want to live in the home, how long you’ll live in the home or purely from what makes the most sense dollar wise. A fully custom-built kitchen versus incorporating stock cabinetry from IKEA or Home Depot is another example of personal preference versus one based on ROI. Planning every possible detail before the actual renovation begins can make a difference in how closely you stick to the budget and in giving some leeway to change things up if you need to before it’s too late.
2. Save Up for Your Renovation
With so many home renovation shows, interior design magazines and home décor blogs out there, it’s no surprise that many homeowners constantly crave renovations. But it’s so important to wait to undergo a renovation until you have the savings to do so. Unless the renovation is an emergency, such as fixing something structural, it’s better to save up for your reno rather than seeking financing. With financing, you end up paying the full price with interest on top of it, and it’s always better to avoid going into debt if you can.
3. Budget for Unexpected Expenses
Anyone who undergoes a renovation hopes that there’s no unexpected expenses, but it’s better to budget for them and be prepared than to end up completely blowing your budget. You could open up walls and find electrical work needs to be done. There could be a beam you thought was strong, but it turns out it’s not. You could end up changing your mind and wanting a more expensive material for your kitchen finishes. Build a 10% to 25% buffer into your budget to account for unexpected expenses- this will help you feel secure if any unexpected expenses do arise.
4. Pay In Installments
When you’re completing a renovation, make sure to pay in installments rather than paying for everything upfront. You want to make sure the work is done properly and to the standard that it was promised. There have also been horror stories of contractors accepting full payment and then disappearing, and you don’t want to end up as one of those stories. Contracts typically set out payments in installments, so this shouldn’t be a big deal. Make sure the payments are tied to the completion of specific tasks rather than dates, so you don’t end up paying 80% for the project when only 50% is finished.
Home renovations can end up going over budget if you’re not careful! Use our handy tips to protect your bottom line when doing a renovation!