Guest Blogger: How to Set a Remodeling Budget – and Stick to It!

Guest Blog #229, Entry #726, October 26, 2011

There are many reasons why people opt to remodel their homes; they may want to increase the resale value of their home or increase their enjoyment of the space while they’re in it.  Or they could be attempting to make the space more functional for themselves and future owners.  Maybe they just don’t like the colors or materials used and they want to impose their own aesthetic on the space.  But whatever the reasons homeowners choose to remodel, there is no denying that the process can get very costly, very quickly.  So if you’re beginning your own home upgrades, it behooves you to set a budget.  You just need to know how to create one that is realistic and then stick to it.  So here are a few tips that will help to ensure you don’t spend more than you can afford while turning your house into your dream home.

Remodeling your home with a firm budget can be a challenge

Image via: Home Design Interior

Ask for referrals

The first step to figuring out what your budget is going to look like is to get a contractor on board to relate the costs for the projects you have outlined.  An honest professional will give you a ballpark figure to work from so that you can determine which projects are doable, as well as provide alternate options that may be less expensive.  But first you have to find this diamond in the rough.  So talk to family, friends, and colleagues to see if anyone can recommend a good contractor to get started.

Get bids

Once you have a basic idea of what things will cost you can formulate a budget that should allow you to get some or all of the work done without breaking the bank.  Remember that there are often setbacks and overages, so work in 20% to cover unexpected costs.  From there you will need to get bids.  Although it can be tempting to hire the first contractor that offers a bid (especially if he’s a smooth talker) you should not hesitate to engage in price comparison in order to secure the best bid.  If there’s a person you like but his bid is too high, see if you can get him to price match.

DIY

One great way to ensure that costs remain low is to see what you can do on your own.  Most contractors are willing to work with you on this score if it means they get the job, so offer to do some demo and cleanup (instead of paying an extra crew member) and do little projects on your own (like installing lighting fixtures, backsplashes, or your new low-flow toilets).  This could really add up and help you stay within your budget.

Do your homework on pricing before you get started

Save up

Now that you know what you want to set your budget at, you need to consider how you’re going to pay for it.  One good way is to save up so that you have all the money you need on hand.  This tactic will definitely help you stick to your budget since you can’t continue once the cash is gone.  On the other hand, a major problem (like rusty pipes, for example) could leave you with a job half finished if you don’t prepare for overages.

Consider financing 

The option that most people choose for payment of home improvements is financing, and many opt for a home equity line.  But if you have poor credit, you may have to pay down some debt and secure credit cards to build credit before you can get the loan you seek.  By choosing this option, you should have a little extra cash at your disposal in case you come up against a major issue in the course of your home remodeling project.

For more Remodeling ideas on Stagetecture, click here.