Do you have a budget in mind for your next home renovation? A home renovation project can be a fantastic experience, but it can also be a budget buster if you're not careful. In this article, we’ll reveal learn how to create a realistic home renovation budget for your project and, more importantly, how to stick to it.
Many people have a dream of renovating their home but don't know where to start. They may not know how to budget for it or they may not be able to stick with the budget in order to see the project through. This article will give you some tips on how you can create a budget for your renovation and stick with it.
In this blog post, we will cover:
- How to create a realistic budget for your home renovation project (and why overestimating is so important)
- Why you need to give each item in your home renovation project a priority value
- Why you need to get at least three quotes for your home renovation project
- How to decide where to DIY in your home improvement project (and where to splurge)
- How to save money (and hassle) by hiring contractors near to you
- The reasons for creating a separate home renovation budget bank account
- Consider every possible cost, no matter how small (with examples)
- Schedule regular reviews to stick to your renovation budget
Create a realistic, but overestimated budget for your home renovation project
The first and most crucial part of ensuring you stick to your home reno budget is creating a realistic budget in the first place. There’s no point in just throwing random numbers out there. You need to research the project, or projects, you have in mind and know the cost of a budget version, a mid-range version and a more luxurious version. Once you have an idea of the cost of all three, you can decide whereabouts your own budget lies and have realistic budget expectations for the work you need to do.
It’s important to note that quotes from contractors can vary wildly for the same home improvement tasks, so do research online, and ask friends and family who have had similar, so you can gauge what is an acceptable price range for the jobs you need doing.
Another vital tip when it comes to any home renovation budget is to always overestimate the costs! How many times have you watched a house fixer-upper programme on TV only to see they run out of budget, or the project was actually thousands more than they expected? It happens all the time. Most people underestimate the costs involved when it comes to home improvements, so make a wise choice by overestimating everything instead. Allow for potential problems and have a safe pool of money set to one side that is for any unforeseen issues or to add the extra finishing touches at the end.
Set aside some emergency funds to cover the unexpected. Setting your emergency amount to at least 10% of your total budget cost is typical. It's better to have it and not need it, rather than to need it and not have it. In such an instance with home improvement, an entire project can grind to a halt if you don't have the funds available to solve issues or cover unexpected costs as they arise.
There are online websites to calculate the cost of your home projects so you can get a rough idea of the amount you’ll need to pay. Once you have a ballpark figure, get at least 3-5 estimates to know exactly where you stand and if your own estimations are correct.
Give each item in your home renovation project a priority value
When you are looking to renovate your home, you need to make a list of all the things that you want to change and then prioritise them. You need to give each item in your home renovation project a priority value. This will allow you to understand what needs to be done first and what can wait. It is important that you set clear priorities because it will help with the budgeting process.
When you have researched all the projects you are hoping to complete, it may be that you simply don’t have enough budget to complete everything on the list. By prioritising the jobs that are most important to you, you can wisely allocate the budget and then come back to the lower-priority jobs when you have saved or sourced more money. It will also help you know when you have enough money for the next step if you clearly note down each task and its cost (remembering to overestimate for unforeseen issues).
You could even take it one step further and break down the priority of each room if you don’t have enough budget to complete a single room in one go. For example, if you are renovating your kitchen, then the cabinets will be more important than the flooring. Or if you are renovating your bathrooms, then the upstairs family bathroom would be assigned a higher priority than perhaps the downstairs W.C.
Every item in your renovation budget should have a priority value. Some things are essential for renovation, some are important but not essential, and some items are just desired or wanted. The best and most followed budgets are those with items listed according to their priority value and work from the essential items first. When you assign a priority value to a renovation item, you would know what renovations you are willing to splurge on or compromise. Giving each item a priority value is doing things in the proper order, and by doing that, you are saving both time and money.
Get at least three quotes for a home renovation project
It is important to get a few quotes for a home renovation project. This will give you the opportunity to compare the prices of different contractors and decide which one you want to hire. It also gives you an idea of what your budget should be for this project and whether all the estimations you created at the beginning of the process were accurate.
You need to get at least three quotes for a home renovation project because it helps you to get the best deal and avoid being overcharged. Not all quotes will be the same, however it's not always the cheapest quote that is the best. Sometimes you will prefer a certain builder and their vision, or perhaps you prefer the contractor with the most experience or who appears more professional.
You need to make sure that the contractor is going to be reliable and trustworthy. They should have a license, insurance and references from previous clients who are happy with their work. You should also talk about your needs with them so they know what they are getting into with your project.
Decide where to DIY in your home improvement project (and where to splurge)
It’s important to decide where to splurge and where to save in a home renovation, especially if you are limited by your available budget. A great way to save costs is to work out which parts you can do yourself. If you love DIY or are happy to get involved, then you can save considerable portions of your budget and splurge elsewhere! For example, perhaps you can do the painting yourself? You might otherwise be looking at around £200 per room for a professional painter which can add up to the thousands for an entire house. If you can do the painting yourself, then you can splurge this saved money on something else that you can’t do yourself. It’s money better spent.
However, while doing it yourself saves money, it is essential to know your limits. Some tasks should go to the experts, so only complete tasks yourself that you know you are competent in, otherwise you could make a costly or dangerous mistake. For example, if you are going to be doing plumbing work in your home, it is best to call a plumber instead of trying it yourself. It's also important to consider whether you have the right type of equipment needed for a project before diving in head first. For instance, if you want to tile your kitchen floor, but don't have access to a tiling saw, it would be best to hire someone who does rather than try your hand at it with a hacksaw or utility knife!
DIY projects can be a lot of fun, but they can also be a lot of work. If you are not sure where to start, you may want to consider the following factors:
Skill level: Do you have the skills necessary to complete the project?
Time frame: How much time do you have to spend on this project?
Cost: How much will this project cost?
Difficulty level: Is this project easy enough for me to tackle or should I hire someone else?
Impact on your home: What is the impact on your home if you decide to DIY or hire someone else?
To speed things up when DIYing, you could enlist the help of willing friends and family, or you can hire handymen. Handymen are often cheaper than tradespeople and they will have worked on many different projects in the past, so can help you immensely. You can easily find them by searching online for a "handyman near me" as well as keeping an eye for their adverts in local small business pamphlets. You can also check out websites like MyBuilder for finding handymen near you.
Save money (and hassle) by hiring contractors near to you
Hiring contractors close to you can save on your home renovation budget. Being local they will not charge you for excess transport costs. As they’re nearby, they’ll be easier to reach and call out if there are any issues during the work or after it is complete. There may also be an element of flexibility in their start times and finish times to suit you. A contractor near you is also likely to use materials that are unique to your environment, making your renovation budget a little less expensive.
Create a separate home renovation budget bank account
Home renovation is a costly process and it can be difficult to set aside the funds for it. But there are ways to make sure that you have enough money to cover it. One way is to create a separate account for home renovation and keep all your spare funds in there.
You can then use this account for all the outgoings that are used for home improvement purposes only. This way, you'll be able to control your budget better and avoid overspending.
Unless you are very organised with your finances, using the same bank account could prove a nightmare as you have your day-to-day spending and home renovation budget mixed up.
Separating the accounts and having a bank account dedicated to the home improvements budget only, will allow you to have a better overview of how much money is left in this account and see at a glance what it's being spent on.
Keeping track of your spending easily will allow you to make appropriate adjustments to your budget when needed.
Consider every possible cost, no matter how small
To create a home improvement budget you can stick to, you must factor in every possible cost, no matter how small. Many times, the reason budgeting becomes problematic is that some items aren't accounted for because they seem so small. However, there are no costs that are too small because, eventually, everything adds up.
It is crucial to consider the seemingly little things like paintbrushes, tape, nails, screws, glue and sealants, amongst others. You must ensure that every detail of the renovation, including taxes, delivery and shipping fees, is appropriately listed in the account. You can account for possible future spending by recording every cost, including the non-consequential ones.
Every little cost, no matter how small and trivial, should be considered when deciding on your budget. This is because the costs of home renovation are often underestimated.
Schedule regular reviews to stick to your renovation budget
One of the most common mistakes that homeowners make is underestimating the costs of their home renovations. This leads to either abandoning their renovation project or going over budget.
So how do you stick to your home renovation budget?
This is not always easy, but it can be done by scheduling regular budget reviews. In order to avoid overspending and keep your renovation on track, you should regularly review your budget and make adjustments as needed.
Reviewing your budget involves a review of your spending in comparison to the home renovations completed. In your check, you keep yourself and the contractors hired accountable for the budget created. Schedule regular budget reviews with any contractors, especially if they are not a set price and expect you to have a contingency fund, and keep a track of all the expenses incurred.
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