Everything You Need to Know About Home Improvement Budgeting
One of the most satisfying things about owning a home is having the ability to create a space of your own. Home improvement projects allow you to do just that by customizing your abode to fit your ever-changing needs and desires. But whether you’re making changes to a brand-new home, like painting the rooms, or embarking on a major renovation project to make an older home feel new, you’re going to need to prepare your finances and budget accordingly.
With the right amount of planning, budgeting, and strategizing, you’ll be able to properly plan out your finances for your next home improvement project.
Figure out what you need
Your first step before you take the plunge into a home improvement project should be to get a plan started. Depending on certain factors, such as the age of your home, the scale of the renovation project, and the type of design you’re looking for, you might need to consider different factors. It may be beneficial to connect with a design center, or create a vision board for inspiration.
For example, if you have a newer home, you may not have to put in too much work or renovation to make it up to date. Painting a few rooms a custom color, adding some built-in cabinets, and adding some new furniture pieces will often be enough to make your home just what you want it to be, and even increase your home’s value. Of course, if your home is a bit older, these cosmetic improvements may also be just what you need to give it a fresh feel and a more comfortable look.
An older home could create more work and cost more to achieve the look and feel you’re going for. Sometimes home renovation projects might mean taking everything down to the studs. It’s just as important to look at what is unseen—electrical wiring, plumbing pipes, heating and cooling ducts for starters. This is key to making sure everything runs efficiently and safely. However, these are often prone to decay, and therefore, if you have an older home, getting this touched up or replaced might often be more vital than simple cosmetic upgrades.
No matter what the overall status of the home is, or whether or not you want to make large or small improvements, getting an overview of these important details is going to play a big role in determining how you’re going to budget.
Determine your costs
Once you’ve given your home improvement project some thought, determine a cost estimate. This involves meeting with people who specialize in the type of renovation you’re looking for. Whether you’re meeting with a team of painters, interior designers, or a construction crew, all of them will be willing to give you a general estimate of how much the total project will cost you.
Cost limits are another vital aspect of renovating a home, therefore it’s a step that shouldn’t be ignored. Oftentimes, people are eager to get started on a home improvement project, and rush into the work without considering their budget. Overspending on a home improvement project can be risky due to how expensive they can be, so prepare yourself for that cost, and avoid taking on excessive debt.
Once you’ve completed a cost estimate, factor any home improvement project’s expenses into your monthly or yearly budget. Depending on the scale of the project, there’s a chance you might need to take some time to save up before you get started.
After you’ve determined your project costs and know how much it’s going to cost, you now have the golden opportunity to start saving well in advance. Keep in mind that, even with an estimate, you may need to give yourself some wiggle room. Oftentimes home improvement projects cost more than the estimate, so saving more than the project cost is never a bad idea.
To keep yourself organized while saving up for a project, keep your home improvement finances separate and secure from your daily spending accounts. You can keep this money organized and separated by managing your money digitally. Doing so can be done using a secure, online savings account that is downloadable directly to your smartphone. These are especially valuable, as you can keep your finances in check, track your spending, and get instant notifications, so you can keep an eye on how much you need to save before you hit your goal.
Even with a proper project budget, and a good amount of time spent saving, many larger home improvement projects will cost you more than you’d be able to realistically save up for in a short amount of time. This could be especially true if you’re working to make an older home feel brand new, as this could increase your costs significantly.
Fortunately, home improvement financing is always an option. There are many different ways one can go about this. Some go straight for home renovation mortgages through their bank. Others prefer to get a HELOC loan, which allows you to finance a renovation project with your home equity. This can be especially good for people with older homes, as they’ve often built up more equity on the property.
No matter what type of home financing you opt for, sticking to a budget is going to be important. In fact, it might be more important when you choose a home financing option, since you’re going to need to be prepared to pay off the monthly payments that will be associated with the loan. This means you’re going to need to incorporate any loan costs into your monthly budget, and account for them.
Always look for deals
Remember that deals are abundant when it comes to home improvement projects. Often in your local city, there might be different home improvement companies that are eager to work on a project. Because of this, many will offer competitive rates in order to score more clients. This is going to be especially helpful for you, and with a bit of research, you’ll be able to find the best home improvement team that will give you the most savings.
Finding deals on a home improvement project is helpful, however, make sure you’re not trading quality for a lower cost. A good home improvement project should be able to fulfil your needs within a reasonable price range. This is why shopping around, reading reviews, and getting estimates from a few different companies is the best way to find deals while still getting the most out of your home renovation.
(Bonus Tip!) If your home improvement project involves green energy, or a home office for your business, you may be able to use this as a tax write-off to save more money in the long run!
Budgeting for a home improvement project is time consuming, but definitely worth it in the long run. With the right amount of planning and research, you’ll be able to determine your budget, save money, and get your home feeling brand new in no time!