Wednesday, April 16, 2014

Budget tips for a home renovation

Home renovations can be quite the headache, however, the prospect of finally fixing your ineffective kitchen layout or swapping your dated tiles for modern designs can be refreshing. Aside from the amount of time and effort involved in taking on a home remodel, the financial aspect can also be quite a burden. Unexpected repairs and changes in the project scope can easily exceed your budget. Get some tips... 

Before you start on your renovation project, it’s important to assess your finances first.

Assess your finances

Before you start on your renovation project, it’s important to assess your finances first. How much can you afford? How much are you willing to shell out? 

While a home renovation has its benefits, spending more than you can afford could put you in serious debt. Avoid these pitfalls by doing the math first

Examine your renovation requirements

Assess your home remodelling requirements. Are these repairs crucial? Do they need to be addressed right away? If you have anything urgent to attend to then these concerns should be first on your list of renovations. Added design features can be addressed at a later stage.

Establish a realistic budget

Once you have examined your financial situation and home renovation requirements, it’s time to establish a realistic budget. Ask for help from designers or friends who have recently conducted a renovation project, as they may have a good idea of how much you'll need to spend. If you’ve already talked to one or several contractors, you may also ask for a price quotation or initiate a bidding process for the scope of work to be done.

Set a contingency budget

Renovations almost always exceed budget expectations, as there are many unforeseeable situations that may arise. Therefore, it is always best to set a separate contingency budget. You may subtract twenty percent from your overall budget for contingency and only use eighty percent for your initial project costs.

Don’t use your contingency fund for unnecessary changes you may suddenly want during the course of the project, like expensive lighting fixtures and special countertops. This contingency fund is for possible delays or changes that will make for necessary costs you may not be financially ready for. Having the extra twenty percent padding on your budget will help you hedge serious debts.


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