Planning a Home Renovation Budget

If you've lived in the same home with the same decor for a number of years, odds are you're ready for a change. Sometimes the change comes to you in the form of some damage to your home or property and you have no choice. Either way, planning a home renovation can be stressful but rewarding. The most stressful part is managing your budget. How much should you spend on paint, fixtures, or decor? How much of your income can go to the renovation or should you take out a loan for the whole project? By following a few simple steps, you can simplify the whole process and not break the bank on your remodel.

Cost

Whether you're doing water damage restoration or wanted a fresh look in the kitchen, the costs to renovate a home can vary greatly based on your property value, chosen materials, and the size of the space being remodeled. It could cost anywhere from $10-$150 per square foot! Most 2,000-square-foot homes are looking at a total cost of between $20,000-$120,000, depending on the aforementioned criteria. This is why you want to make sure you have the money you need to complete the renovation and don't end up with a halfway remodeled bathroom.

The best way to approach paying these costs is to use money you've saved. As a general rule, you don't want to spend close to the value of your home remodeling it because you're losing money. Instead, look at your monthly budget and determine how much you could put toward a home renovation fund each month. Do the math to find out how much you can save in a year, and use that figure as a benchmark of where to start pricing wise. There are also home equity loans if you aren't looking to pay from your monthly income, but remember these come with interest and monthly payments down the line.

Three Steps

There are three easy steps to any home renovation project: prioritize your projects, outline your costs, and collect your bids. When your prioritize projects, you want to look at what needs to be done the most. If you're fixing water damage in an upstairs ceiling and cosmetic inconsistencies in the living room, tackle the upstairs first. This will ensure any problems that could potentially get worse are handled, and if money runs out, then you're only left with less pressing issues. Next, you'll want to outline your costs. Determine how much you're willing to pay for each room that needs work, and do some research to see if you've devised a reasonable budget. For example, it's recommended to spend no more than 15% of your home value renovating a kitchen. Finally, start collecting bids from contractors you know and trust or who were recommended to you. You can evaluate if any of them fall within your price range and if they can complete the job in the time frame you need it.

Considerations

Figuring out your budget isn't the only thing to focus on during a renovation, though. You also want to look at the cost versus the value you're adding to your home. If you sink $30,000 into a renovation that only adds $10,000 to your resale value, then you might have paid too much for something extravagant. You want to make sure your money will work for you in the long run. You can also talk with friends or neighbors who have recently done a remodel on their home. Their first-hand knowledge and experience might save you some major headaches once construction is under way. Finally, be sure you research the materials you want used in your home. If you have allergies, make it clear only certain types of paints or fabrics should be used.

Renovating is a fun way to spice up your home and make it feel like it new!