How To Create a Realistic Home Renovation Budget

Perhaps one of the most difficult aspects of any home renovation project is sticking to the proposed budget. This is in large part because most Longmont, CO, homeowners don’t fully understand the costs associated with a remodel and, therefore, are unable to adequately prepare their finances. To ensure your project goes smoothly and without having to spend more money than you set aside, use this guide.

The Average Costs of a Home Remodel

Before you prepare your finances, you should know what you’re getting into from a financial standpoint. Below is a brief overview of the average costs of common home renovation projects:

Bathroom Remodel: $2,500 to $25,000
Kitchen Remodel: $4,000 to $60,000
Basement Remodel: $11,000 to $30,000

Because the average costs of common projects vary exponentially, you should never enter a home improvement project without first developing an airtight plan.

How To Come Up With a Home Improvement Budget

First and foremost, decide how much you can and are willing to spend on your renovation. To come up with a realistic and doable number, consider two things: your home’s value and how you plan to finance the project. The rule of thumb dictates you should not spend any more than 5% to 15% of your home’s value on a single room. Once you come up with a number you’re comfortable with, consider financing. Whether you plan to pay for the project in cash or with a home improvement loan, make sure the costs do not exceed your available funds.

Tips for Staying Within Budget

Once you have a figure to work with, it’s time to start assigning funds to each individual aspect of the project. Though tedious, this step is necessary to prevent overspending.

Professionals first recommend setting aside 10% to 20% for unexpected costs. Next, gather estimates from contractors for labor, which will be your biggest expense. Find contractors who can stay within the budgets you give them but who have reputations for quality work.

Finally, calculate the cost of materials. Though you are probably the most excited about finishes, they should be your last priority, as you can easily compromise on materials whereas you cannot compromise on the quality of labor.

A home renovation can be costly, but it doesn’t have to break the bank. Use the above tips to create a financial plan and stick to it.