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Budgeting for a Remodel, How to Stick to Your Budget

Budgeting for a Remodel, How to Stick to Your Budget

Have you been putting off a remodeling project because you’re afraid of the total cost?  Do you need help setting and sticking to a remodeling budget?  We’ve done a little bit of research and banked on our experience to provide you with a few tips on how to help you stick to your remodeling budget.

Be Realistic

The most important thing you can do when setting up your remodeling project is to be realistic.  Don’t try to remodel your kitchen for a few thousand dollars.  In fact, a realistic budget is probably much more than you initially think it will be.  That’s because of all the work that goes on behind the scense.  You may look at your kitchen and say, cabinets, flooring and appliances only cost a few thousand dollars, but what you don’t see Budgeting for a Remodeling Projectare things like having to tear down the drywall, replace the electrical wiring (required for most older homes), reinsulating, renting dumpsters for the disposal, all of the expensive and time consuming trim details, and many other hidden expenses that can go along with home remodeling.  As a rule of thumb, it the materials are going to cost you $5,000, the whole project is likely going to cost between $10,000 and $20,000.

Don’t Give Your Contractor Your Final Budget

When arriving at your remodeling budget, you may decide that you can afford to spend $10,000.  Don’t tell your contractor that $10,000 is your budget.  Don’t tell them for two reasons, first of all, a contractor will spend whatever figure you give them.  And second of all, there will ALWAYS be overages!  Whether it’s some type of hardship getting a building permit, or some type of mildew, rot or infestation you had no idea about, there will always be extra costs associated with your contractor’s budget.  Therefore, it makes sense to give your contractor their own budget.  If you are willing to spend $10,000, tell your contractor that you have $8,000 to spend.   If you make it through the demolition part of your remodeling and you haven’t hit any extra costs, you can choose whether or not to use that money toward upgrades, or maybe even save some of it.  However, chances are, you will still easily spend the full amount of money you planned to.

Don’t Get Carried Away

When watching your contractor greatly improve one of your rooms, you may get excited and start asking them to expand the project.  Be very careful before you do this. Additions to contracts are not often put in writing so these are costs that could easily spiral out of control.  Plus, instead of getting economies of scale from your contractor, it could actually cost you more because your contractor will then have to start managing multiple projects, which can lead to distractions and more cost overrages.  You’ll want to keep track of any overrages that you have so that they don’t add up to more than your budget.  For example, when your contractor is working on your kitchen, it is easy to start upgrading fixtures, flooring and the like, but remember that these upgrades at up very quickly.  While a few cents per square foot doesn’t sound like much, it can really make a difference over the entire project.  Don’t get carried away with upgrades and try to stick to your original plan.

What Others Are Saying About Remodeling Budgets

We visited some other sites to find out what they are saying about remodeling.  Here is what they had to say.

First, according to Brittany’s post at Quality Home Concepts, here are five tips to help stay within your remodeling budget:

  • Set a realistic budget. Know upfront what you can and can not afford, and how much you are or are not willing to spend on your project.
  • Prioritize. Decide what needs to be done first before you take on additional wish list items.
  • Leave extra funds in your budget. Don’t immediately delegate all of your money to the entire project, estimate your spending based on 80–85% of your budget at the beginning so you have 15–20% set aside for any unexpected expenses.
  • Pay attention to the detailed cost estimate. Review the details of your cost estimate prior to any work being done to make sure everything is in order.
  • Redesign what you already have. Cut corners and stay on budget by choosing certain projects within your remodel that can updated instead of completely replaced.

You can read the full article at 5-tips-for-staying-within-your-remodeling-budget.

Some good tips here.  It’s good to see that they agree with the being realistic and keeping extra funds for overrages.  They also offer a few ways to help reduce your overall remodeling costs.  We suggest that before you create a budget for your particular home remodeling project, that you look for some specific expense information depending on your location and the specific type of remodel (kitchen, bath, basement, outdoor, etc.), so that you can find out the important issues to address with your contractor BEFORE you start the project.

Have any ideas on remodeling? We’d love to hear them below.

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