Keep Your Renovation Costs in Check by Leaning on These Budgeting Tips

On average, homeowners spend over $6,000 on home renovation costs each year. Whether you’re upgrading a dated kitchen or installing new floors, home renovations add up. It can be easy to overspend without the right planning.

If you’re in the middle of a big renovation, you might be wondering how to keep your costs in check when on a budget. Thankfully, a little research and the right tools will help you stick to your budget.

Learn how to spend wisely on your renovation projects with these expert budget tips.

Determine the Value of Your Home

It’s easy to get carried away and spend thousands on a single room when creating your dream home. But as a rule of thumb, you don’t want to spend more than 10-15 percent of your home’s total value on one area.

Keep spending proportional to home value. Break down each area of your renovation and plan how much you can spend per room beforehand.

Pick Upgrades That Improve Your Return on Investment

Certain home improvements are only cosmetic and meant to make your home suit you. But spending wisely can improve your return on investment as well.

Some home renovation projects have a higher return on investment. This is better for you if you plan to sell your home in the future.

Figure Out How You’re Financing the Projects

Decide how much you need to spend on your projects and then determine how you’ll pay for your renovation. Will you be paying in cash, securing a loan, or using credit?

If you want to take out a loan, consider using a construction loan calculator to help you plan your payments.

Use a Budget Template

Completing renovations on a budget? Proper planning tools prevent you from spending more on your renovations than you can afford.

A renovation budget template helps you break down projects by room and cost. Another great planning tool is a renovation budget planner. You can use a notebook or find one online.

Start by writing down your wants and needs for the area. Focus on making your home functional and efficient before you start with cosmetic upgrades.

Research Cost Estimates

Quotes and estimates might be different than your final bill, but those ballpark numbers help you plan your budget.

Research cost estimates beforehand to get an idea of how much money you’ll need for each area of your home. Remember, labor accounts for 20 to 35 percent of a renovation budget on average.

Different finishes and high-end materials add to your budget as well, so make sure you look into material costs as well.

Request Bids to Keep Renovation Costs Within Your Budget

The last step in preparing for a renovation is to contact different contractors and ask them to create a bid for the project. Treat your renovation like any other investment and shop around for the best deal.

Find a contractor that fits your budget and your timeline. Communicate clearly with them so your contractor understands your needs. Let them know which parts of your project you want prioritized to keep your renovation costs in check.

Looking for additional budgeting tips? Check out our other blog posts for more advice.

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