Budgeting for a home renovation can feel overwhelming. But, it doesn’t have to be! I’ll be sharing my three most important tips on how to budget for a home renovation, the different elements of a home renovation that you need to be budgeting for, and some helpful budgeting resources if you’re just getting started.
1. Plan Well & Plan Ahead
If you’re planning a home renovation, give yourself enough time to thoroughly plan and research your needs before setting your budget. We made the mistake of starting a renovation one month before our wedding (yikes!), and with all the chaos of the wedding planning, I feel like there were a lot of things that slipped through the cracks with our renovation. Being careless with your planning can end up being a costly mistake.
2. Set A Contingency Budget
Give yourself a contingency budget. If there’s one thing I learned during our renovation its to not expect everything to go according to plan. We happened to be during the bulk of our renovation at the height of the supply chain crisis where delivery dates were either non-existent or months in advance. There will be a lot of things that pop up during a renovation that are completely out of your control, and you’ll oftentimes be faced with making some tough choices that might end up costing you money you didn’t plan for. So, having a small budget set aside to cover unexpected costs when you’re setting your initial budget will help prevent a major hit to your bank account.
3. Know What To YOU Need To Budget For
When it comes to renovating for a home renovation, it isn’t always a “one-size-fits-all” topic. Every renovation is unique, given its location, to cost of labor and materials during the time of the renovation, and how much work actually needs to be done. But, how do I know exactly what to budget for? Well, we can break down a typical renovation budget into three categories. By understanding these three components of a renovation, and allocating your budget accordingly, you’ll likely have fewer issues to deal with.
What Do You Need To Budget For?
When it came to the renovation, there were a lot of unknowns with understanding the cost of things from a holistic perspective. For example, there are a lot of different places you need to allocate a budget towards that you might not think of, especially if you’re a first-time-home-buyer like myself. I’ve learned that there are three different categories of a renovation that you need to take into consideration and be budgeting for. Depending on the scope of your renovation, you’ll need to consider costs towards structural needs, functional needs, and interior details.
1. Structural Needs
The first category is anything having to do with the structure of the house and costs associated with it. This can include anything from:
- Dump fees
- Structural changes
- Replacing windows/doors
- Basically anything that makes the house livable
2. Functional Needs
The second involves everything that makes the house function. These things can vary depending on where you live and the type of home you’re renovating, but here are a few examples of functional needs where you can expect a big chunk of your renovation budget to go:
- Or anything else that makes your house function
The cost of materials can not only add up quickly, but labor costs alone can eat up a huge chunk of your budget because these are not something that should be left to DIY.
3. Interior Details
Lastly, all the interior details that make the house a home. These things are typically decorative, but still essential to making a home function. This includes things like:
- Kitchen & bathroom cabinets
- Light fixtures
- Window treatments
- And of course, none of this includes the cost of furnishing a home
It’s important to note that prices for each of these can vary depending on where you live and when you’re renovating. But I recommending reaching out to contractors early on in your planning process to get quotes and estimates for what you’re looking to get done.
Helpful Budgeting Resources
In hindsight, if I had more time to plan our renovation, one thing I wish I knew more about was planning every detail of our budget, and EVERYTHING that goes into it. It is so important to set up a budget and stick to it BEFORE starting a project. We would’ve been able to avoid some of the problems in our home renovation had we done that.
I want everyone to learn from my mistake and understand the importance of budgeting before tackling a big project. In the future, I’ll make sure to adhere to a strict budget and to make sure I have enough money set aside to cover unexpected costs along the way.
Bankrate is an amazing resource for anyone looking for help with budgeting and planning a DIY renovation. They offer things like:
- Free budgeting courses
- Budgeting calculators
- DIY budgeting advice.
Be sure to check out their YouTube channel for more helpful tips!