Renovating your home can be a great way to add value and make it more comfortable to live in, not to mention an exciting journey. However, it can also be an expensive and time-consuming process. Budgeting is crucial to ensure the renovation project is completed within allotted time and budget saving you headaches along the way. Here are some tips for effective renovation budgeting that will make you look like a pro!

First, and most importantly, determine what you can afford to spend and how you are planning to pay for it. Look at your income and expenses to see how much money you have available each month. Then, consider how much you can save for your renovation project. You may want to set aside a specific amount each month or save a lump sum over time. If you’re going to be saving over time, I recommend opening a separate savings account you can transfer funds into weekly or monthly remaining untouched and separate from your daily finances. If you plan on financing to pay for your renovation, fine tune those details before finalizing the end budget. You should also include a cushion within your budget of 10%-20% for any unexpected expenses, damaged goods you may have to deal with and some minor changes or upgrades you decide you want to add. I can almost guarantee something will arise you will want to add to the project, you can use the cushion for these types of expenses.

I also like to advise people to include furnishings into your budget, if needed. If you are planning on getting new furniture or accessories for any room you’re renovating, make sure you’ve including this. It’s not fun getting to the end of a project and having to put the same old, 20 year old couch back into your living room because the budget didn’t include a new one. Now, if you’re planning on keeping your furniture, great, no need to worry about this. However, if you’re looking for a brand new space down to the hand thrown ceramic vase, plan accordingly and be detailed with your wants.

Once you have your budget finalized and the mode of payment determined, decide the projects you would like to tackle within your home. Are you looking to replace flooring throughout your entire house? Does the kitchen need remodeling? The rooms in which you will see the most return will be the kitchen and bathrooms. If you are planning on selling within the next 5 years or sooner, you may want to choose rooms that are going to pack a punch when prospective buyers walk through. If you’re having trouble deciding which spaces to renovate, a great exercise is listing out projects you would like to complete and numbering each in the order in which they are most important to you. Once you’ve determined which areas are going to be of focus, it’s time to do some homework.

There are quite a few factors that go into pricing out a renovation project, including where you’re located and what the demand is for the work you are looking to hire out. I would also keep in mind that if you have a house that has a market value of $150,000 you are not going to want to spend $75,000 on a kitchen remodel. A good rule of thumb is to not spend more than 10%-15% of your home’s value in a single room. Doing some research regarding the surrounding homes and recent upgrades may be of value to you, especially if you’re looking to sell within the next few years.

Carefully make a list of items you will need to purchase for the project. Let’s say you are completing bathroom remodel; you’ll need to include flooring, light fixtures, plumbing fixtures, vanity and vanity top, sink if not included with vanity, accessories, mirror, shower and bathtub material, tile and grout, paint samples and paint. A good rule of thumb is to go through your current space, look at everything you will be replacing and write it down. This is just covering the materials portion needed to be purchased, not including labor. You will inevitable forget to add something to your list and that’s ok, your cushion is there to cover items like this. The more you have completed at this stage, the easier it will be down the road to communicate with your contractor about your desires.

Next, research the costs associated with your renovation project. This may include materials, equipment, labor, and permits. Labor is going to run about 35%-50% of the renovation cost so do not underestimate labor for your project. Research and add up costs of all materials needed for your project. Please also consider, for kitchen and bath remodels, how will this affect you financially if you’re left without a kitchen or bathroom to use during renovations? Will you be eating out every day? Are you going to be staying at a hotel while the project is being completed? These expenses are often left out of the budget and can add up quickly, it’s important to have these included in your budget.

At this point you know what your primary needs are and what your budget is. You will now need to reach out and gather multiple bids for your project. Reach out to friends and family to inquire about a contractor they trust and would recommend. Look at reviews of their company and work from past clients. Once you have chosen a few contractors, you are going to want to be as detailed as possible about the scope of work you are looking to have completed along with your timeline. Also, inquire about any issues that may arise and how he/she would address those issues. A bid that comes in extremely low may be enticing but I would advise against it, especially if it’s too good to be true. The more communication you have between yourself and the contractor, the better. It is not their job to read your mind in regards to your hopes for the space. Include details even if you don’t think they’re important. Once you have selected a contractor you feel comfortable with and trust, have he/she look over your detailed list of items to see if there is anything you may have missed.

Finally, stick to your budget as closely as possible. Keep track of your expenses and adjust your budget as needed. Remember, it's better to spend more on quality materials and workmanship than to cut corners and end up with a subpar renovation. Cutting costs may actually cost you more in the long run. Remember, quality over quantity.

By following these tips, you can create a budget for your renovation project that will help you achieve your goals without breaking the bank.

If the information I’ve laid out above seems overwhelming, you may want to look at hiring an interior designer to assist you through the process. Please contact our studio for more information regarding our process and how we can help.

xxLH