Start Your Next Home Project with these 5 Budgeting Tips
If you make smart money decisions throughout your life, it pays to extend your budgeting skills to making improvements to your home. Sometimes, though, it can be hard to figure out where to start. A great idea you see on a home improvement show or in a magazine may be a solid investment or a money pit. Either way, making and sticking to a budget is an essential part of any remodeling project. Follow these five simple steps to create a home improvement budget that works for your life.
1. Determine Your Wants vs. Needs
The first thing you need to consider when creating a home improvement budget for is to determine your wants versus your needs – with needs taking the priority. Needs might include things such as replacing a failing water heater, fixing a leaky roof or replacing very old, unsafe appliances. Wants might be upgrading to granite countertops, installing wood plank floorings or adding a pool. Make a list and prioritize it with your needs listed first and your wants second.
2. Get an Estimate or Price it Out
After you have a prioritized list, hire a recommended professional to give you an estimate. Be sure to have them price out each improvement individually -- as well as one lump price -- if you hired them to complete everything on your list. Often, you can get a discount on labor if you hire the same person to perform multiple projects. If you aren't able to do all of your home improvement projects at once, you'll be able to estimate your slimmed-down cost on your own. If you like to tackle projects yourself (DIY), visit multiple home improvement stores and price out everything you will need to complete your projects. Keep an accurate price list and do not be afraid to ask stores when they run sales to ensure you get the best price on everything you'll need for your home improvement projects. If you choose to shop online, remember to factor in shipping and return policies.
3. Decide What You Can Afford and What You Need to Finance
Take stock of how much money you currently have available to put toward your home improvement costs. Look at your savings account or any other source of income. If you do not have enough to cover the cost of your needs, research your finance options. Be careful not to overspend -- and be sure you will be able to afford your monthly payment prior to signing for the loan.
4. Plan for the Unexpected
Things will always be more complicated than expected and there will always be unforeseen expenses. Always. So plan to budget for the unexpected. Add a buffer of about 10% for small uncomplicated projects -- and up to about 25% for multiple and/or complicated projects. If you are hiring a professional, ensure that their estimated price does not include your buffer. In other words, if your entire project is estimated at $10,000 and it is complicated, make sure that you have about $12,500 set aside to complete your home improvement projects.
5. Figure Out Places to Cut BackThere are places to splurge, and places you can save without losing much quality. One big way to cut back is to do as much of the work yourself as possible. Areas, where you'll want to hire out labor, might include; major plumbing and electrical, structural changes, replacing windows, installing cabinets, and replacing siding or the roof. If you really want to be frugal, consider a few of these options:
- Shop for clearance-item floor and wall tile
- Replace cabinet doors instead of buying new cabinets
- Consider vinyl flooring instead of tile
- Rethink laminate countertops, or opt for composites instead of granite or marble.
Following are some average costs for home improvement projects. To learn more, do your research.
Avg. National Cost
|Home Design and Decor|
|Install Blinds or Shades||$672|
|Paint Home Interior||$1,661|
|Paint Home Exterior||$2,594|
|Install a Playground or Swingset||$502|
|Seal or Waterproof a Deck||$798|
|Repair a Deck||$1,422|
|Install a Patio or Pathway||$3,372|
|Build a Deck||$6,192|
|Install New Faucet||$242|
|Install a Bathroom Fan||$359|
|Install New Tub||$2,896|
|Install New Appliance||$196|
|Install Glass Blocks or Tiles||$746|
|Install New Cabinets||$4,596|
|Install New Countertops||$3,248|
Your home is likely the biggest investment you’ll ever make. Take the time to budget effectively – and you’ll add more enjoyment to your home – while feeling great about your financial decisions.