How to set a home improvement budget
Sometimes home improvements are necessary and sometimes there are projects we just want to do to improve our home. Either way, making and sticking to a budget is an essential part of the remodeling project. Follow these 4 simple steps to create a home improvement budget that you can actually stick to.
Wants vs. needs
The first thing you need to consider when creating a budget for home improvements is to determine your wants versus your needs. Your needs should take priority over your wants. 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. This list will be important to have before proceeding to step two.
Get an estimate or price it out
After you have a prioritized list, hire a well-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; however, 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 are a do-it-yourself kind of person, visit multiple home improvement stores and carefully 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.
Consider what you can afford and what you can finance
Take stock of how much money you currently have available to put towards your home improvement costs. Look at your savings account or any other source of income, savings or stock you might have. If you do not have enough to cover the cost of your needs, research finance options. But be careful not to stretch yourself too thin and be sure that you will be able to afford your monthly payment prior to signing for the loan.
Don't forget to budget 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.