The Ultimate Guide to Budgeting for Home Renovation Projects

For many homeowners, a home renovation is an exciting time to get creative, fix issues, and transform their space into the home of their dreams. However, the excitement can quickly fade when the price of a home remodel becomes a reality. And most experts will tell you that renovations almost always cost more and take longer than initially planned.

Budgeting for home renovations can be challenging if you don’t approach it strategically. Before you’re swept away with picking out finishes and hardware, take the time to research, ask questions, plan, and create a realistic budget for your project using these guidelines.

Prioritize Expenses:

Start by clearly defining your renovation goals. Will you focus on specific rooms like the kitchen, master bedroom, or bathrooms, or is the home in need of a gut rehab? Here are a few questions to ask yourself:

• What are the home’s pain points? First things first, is your home safe and liveable? Are repairs or maintenance needed on the roof, foundation, windows, doors, or walls? Are the home’s electrical, plumbing, and HVAC systems up to code? Once any structural or functional issues have been addressed, you can focus on interior changes such as layout, storage issues, or an updated look with new appliances, paint, or finishes. Allow the home’s core issues to act as your guide.
• Which features are needs versus wants? Make a master wishlist of everything you envision in your ideal renovation. Then, prioritize “needs” or “must-haves” compared to “wants.” For example, a watertight roof is a “must-have,” while a chef’s kitchen with top-of-the-line appliances might be considered a “nice-to-have.”
• How long do you plan to stay in this house? If you plan to sell soon (or want to try your luck flipping a renovated house), you might focus on renovations that add value and appeal to a broader buyer’s pool. On the other hand, if you intend to stay put, focus on features that fit your taste and lifestyle and enhance your enjoyment of your home.

Budget Basics:

Once you’ve identified your renovation goals, it’s time to create a realistic budget. Consider the following:

• Do the research: To get a ballpark idea of what your ideal renovation may cost, begin with some basic online research. In addition, consult trade websites and publications for cost comparisons, and talk to a range of experts in your area, including design pros, architects, or contractors who can help you get a big-picture sense of project costs. Finally, speak with friends and family who have recently completed a home renovation project to get their perspective.
• Figure out how much you have to spend: Whether you’re financing your renovation with a personal loan, savings, or a Home Equity Line of Credit (HELOC), you’ll need to tailor your remodeling plans accordingly to comfortably fit within the scope of your funds. Having a firm number will help keep project costs in line once the work begins.
• Get quotes: Before reaching out to contractors, ask for recommendations from friends, family, and local trade organizations. In addition, create a clear vision of your project that includes as much detail as possible. Consider using an online resource to create an “idea board” you can share with potential contractors so they’re all quoting from a shared project brief. Get at least three quotes while being clear about the scope and budget for your project. A reputable contractor will want to view your space to provide an accurately itemized quote that includes materials, labor, and other costs associated with your project. Check their references, recent work, and online reviews, and be careful of choosing a contractor based on just a low bid. Your goal should be to hire someone who provides quality work at a fair price.
• Create a working budget: Once you’ve chosen a contractor and have their quote, you can create a working budget for your project. Many homeowners underestimate the cost of labor and materials and are shocked when they receive a contractor's quote for the project they’ve envisioned. Now is the time to refer to that list of needs and wants and work with your contractor to determine what changes could be made to bring your project in line with your budget.

Your budget should include all quoted project costs as well as permits, inspections, and cost-of-living expenses if you need to move out during your remodel. Many experienced renovators recommend earmarking 20% of your overall budget as a contingency fund to cover unforeseen expenses that almost always arise during a renovation.

Cost-Saving Strategies:

It’s no secret that homeownership is expensive. If you’re looking for ways to save money on your renovation, try these straightforward ideas:

• Repurpose materials: Cabinets, light fixtures, flooring, and other materials that are in good shape can be refinished rather than replaced with new ones.
• Do your landscaping: If you’re willing and able to invest the time and sweat equity, sprucing up your landscaping yourself can save big. There are plenty of online resources to help you plan appropriately for your growing zone.
• DIY your demo: Removing cabinets, backsplashes, or tiling can save money on demolition costs if you do it yourself. On the other hand, it’s best to leave a complicated demo to the experts if it involves plumbing, electrical, or load-bearing walls.
• Shop for deals: Keep an eye out for sales on items you know you’ll need to purchase and compare shop between suppliers. If you’re buying multiple appliances like a refrigerator, stove, oven, and dishwasher, ask if there are any deals or discounts available.
• Pick up a paintbrush: Costs for professional painters can add up quickly, especially if your renovation involves multiple rooms in your house with baseboards and trim. If you have some experience with a paintbrush, handling the job yourself could mean significant savings.

Most homeowners have at least one home improvement project on their wish list, whether it’s big or small. But thorough research and planning and a realistic budget can help make your project a reality with as little stress as possible – and without draining your bank account, either.

In Conclusion:

In summary, starting a home renovation needs careful planning and a practical budget. By choosing which expenses are most important, learning about budgeting, and finding ways to save money, you can make your renovation plans come true without spending too much money. With some planning and research, you can make your home look better. You can bring your ideas to life without spending too much money.