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How to Set a Remodeling Budget - And Stick to It!

Brian Nelson,

March 14, 2017

Managing Your Money

Articles

remodel budgetingIf you’re anything like me, you’ve scoured Pinterest and saved enough home improvement pins to remodel all the homes on your block. Collecting ideas and seeing how it can all come together are half the fun. Making them a reality? Well, there’s some work – and expense – involved there. When you’re ready to take the home improvement plunge, here are some key things to keep in mind so you don’t sink your budget.

Make a Plan

Sounds simple and straightforward, right? Yet so many of us start on a room and do not necessarily think through the cost for each stage of the project. If you re-paint a room, will you need to change window coverings, furniture, or decorations? What is a must-have vs. a wish list item? Are you remodeling for yourself or prospective home-buyers? By thinking through your entire project up front, you can make sure you focus your energy – and budget – in the right areas.

Quantify It

You should have a good idea of what each major item on your remodel plan will cost before you ever reach for your debit card. Whether you plan to work with a contractor or DIY, a simple internet search can give you a ballpark cost. If you’re borrowing money for your project, you’ll want to make sure that you’re borrowing enough to complete your entire project.

Set your Budget

Once you determine the amount that you’re comfortable spending, set your budget and stick to it. Pass each additional spend through this test:

  • Does it make a large impact in the room/project?
  • Am I willing to remove another item from my list?
  • Does the item add function, fashion, or both?

This is often the hardest part of the remodel, but if you can stay strong and on budget, you’ll enjoy your remodel much more when it’s all complete.

Expect the unexpected

Whether you’re knocking down walls or pulling up flooring, you can usually plan to run into a few surprises along the way. A good rule of thumb is to have an extra 15 -20% of your budget available to address any repair work needed. Depending on how handy you are, you may be able to do the repairs yourself; otherwise, it never hurts to know a few good electricians, plumbers, and general handymen to help you through a tough spot.

Commit to a Goal

Was your remodel prompted by an upcoming graduation? Wedding? Backyard Barbeque? Whatever it is, having a defined end-point to your project will help you stay on task. Plus, what a great way to celebrate a job well done!

If you’re ready to start a home improvement project but need some help (financial help, that is), we’re here for you. Visit ubt.com/next to get started.

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This blog article is for informational purposes only, and is not an advertisement for a product or service. The accuracy and completeness is not guaranteed and does not constitute legal or tax advice. Please consult with your own tax, legal, and financial advisors.