How to Stick with a Budget for Home Renovations Projects

December 2, 2020
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How to Stick with a Budget for Home Renovations Projects

Homeownership is not free of cost—there is emotional expenditure, physical and of course, financial expenses. Most homeowners spend 1 to 2 percent of what they pay for their house per year just on house renovations.

But what if you want to handle some home renovations or even try to get the whole house remodeled? Do you know which projects are most important and where your money should be put? How can you create an affordable, manageable budget, remain within that budget, and get the results you want?

We have some thoughts on how to create a home improvement budget efficiently and get the most out of your home updates. Remodeling homes affordably are possible.

Which home improvement projects should you choose?

It can be difficult to decide what to do with your own home, time, and money, particularly if your budget is small. How do you determine which changes to make at home?

When you begin making those decisions, here are a few things to keep in mind:

Consider the importance of changes in structure. They're not as exciting as the new master bath, but when you spend on simple home repairs, you're more likely to recoup your investment. For example, new siding leads to a more energy-efficient home, and when you sell, you can theoretically recoup 76 percent of that cost.

Look for minor upgrades that add instant value. A fresh coat of paint, a new front door, or the inclusion of smart home tech features are reasonably simple improvements that add value. For example, you can start saving on your monthly utility expenses by installing a smart thermostat.

Plan for the future. How long are you going to live in your home? You can decide what projects to include in your remodeling or renovation with that bit of info. You may want to rethink adding a second floor or additional stairs if you're a baby boomer and you plan to stay in your home as you age. 

Things to consider when setting a home improvement budget

Whether you hire a contractor to complete a full renovation or take on some of the work yourself, or go the full DIY route, it all needs money. You need to build a solid budget in any situation.

So how do you budget a remodeling or a renovation? You need to know what you want first.

Determine where it should begin. Figure out your project's scope. Look at your home, decide what you want to do, in order of importance, and make a list of those things. Keep both structural and aesthetic updates in mind, as previously noted. For example, if your kitchen is comfortable and fully operational, you may forgo a kitchen renovation in place of a more energy-efficient heating system. When determining how much you can actually spend and which projects you will need to drop to avoid going into debt, listing things in order of importance helps you later.

Figure out the price tag. Considering the cost of supplies, labor, equipment, and tools, and cleaning up, take the list and decide what each project would cost. When evaluating these expenses, decide whether you're going to need help or if there's something you can do yourself. When you calculate the costs, consider the importance of your projects. Some upgrades add value over time, such as landscaping, room additions, or new siding. Consider how long you plan to be at home and don't think you're going to make back every penny with a sale.

Assess labor costs. Ask around for suggestions from friends, relatives, or neighbors who have recently made home improvements if you are hiring a contractor Before finalizing the deal, we recommend narrowing your decision down to three and ensuring that they have the proper license. From all three, get quotations.

Finalize your spending. Of course, going for the cheapest is tempting, but when choosing your contractor, consider their skill and the long-term consistency of their work.

Finalize the spending. And how can you pay for it all and how much can you spend? If you're paying out of your pocket, so you already know exactly what you're going to spend. If not, you can take the loan route, basically with 3 choices:

  • a home equity loan
  • a home equity line of credit
  • a cash-out refinance

When you borrow, you're going to have to decide what the bank is going to give you and what you can afford to pay back. The payment would add to your monthly expenses, and without overextending yourself, you need to make sure you can cover those costs. If you know what you should spend, you can change your project list to suit your budget.

If you planning to renovate your home, contact a Home Renovation Contractor in Connecticut

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