Getting ready to renovate your home? A home renovation is an incredibly exciting project, but also a costly one. Over a short time, you can radically change the layout and design of your home.
But a project like this requires proper financial planning, so read through our short guide to give yourself an idea of how best to manage and plan your home renovation costs.
Setting a realistic budget
Before you begin, it’s vital you set a realistic budget. Knowing exactly what you can afford to spend can be the difference between finishing a project on time and living on a building site for years.
When creating your budget, you should take several factors into account, including the cost of labour and materials, the scope of the project, and how you’ll fund it.
Understanding material and labour costs
To make an accurate budget, you need a proper understanding of material and labour costs. Of course, these will vary between businesses and even different parts of the country.
Although you could source materials yourself, your chosen contractor likely has certain connections that can get the same product at a discounted rate.
Managing unexpected costs
As with any large-scale project, you might encounter some unexpected costs. These can come in a variety of forms, from construction delays to unforeseen issues that need to be worked around.
To manage these effectively, it’s best you plan for them in advance. While you can’t know exactly what issues will occur, you can set some funds aside just in case things go wrong.
This will give you a nice cushion to fall into, rather than going into unexpected debts.
Financing your renovation
Now you know what your renovations should cost, it’s time to finance the project. If you have enough in savings, you might want to use that.
Savings can limit the financial burden of loans and other finance options, but they dwindle your safety net. In other words, if something goes wrong, then you might be unable to afford fixing it.
Of course, you could always use a credit card or a long-term loan. These financial options give you quick access to funds and let you pay back what you owe over a set period.
For homeowners with a less-than-perfect credit score, exploring options like credit cards for bad credit could be a viable way to finance smaller renovation expenses.
If you do take out a loan, it’s important to compare interest rates and read the terms carefully. This can save you from any headaches down the line.
Tracking progress and budget adjustments
If you want to stick to your budget, then you have to keep an eye on your expenses as you go.
Tracking your ongoing costs can keep you aware of any unexpected changes, and let you know if your budget needs adjusting with plenty of notice.
