The shock and surprise of getting the final bill on a remodel can be a cruel reminder that budgeting often goes awry. That doesn’t have to be the case though. It takes some careful planning, but when done properly, a budget for home remodeling can be set in advance, and the project can be kept on track. Learn how to set a budget for a home remodel here.
Start With A Number, Not a Dream:
The best way to avoid a budget spiraling out of control is to start with a hard ceiling that cannot be crossed. This might be $10,000, $50,000, or $100,000. That number will depend on the space being remodeled, as well as the finances of the homeowner, of course. There is no “right” number, but online research can help reveal average costs to keep things in perspective. (Check out this article about home remodeling budgets from Home Advisor.)
Consider Add-on Costs:
There’s often more to squeeze into that number than first realized. Adding an extra 10% contingency to the budget should be standard. Otherwise, subtract that 10% from the overall budget to build it in, and only work with the remainder as actual, usable expenses.
Prioritize Individual Features:
Once the firm budget has been set, then it’s time to go back to that dream. For most people, going big for every single component or feature will quickly crush the budget. So start prioritizing the list to determine what’s absolutely essential, what can be comprised, and what can be done without. Whether it’s cutting edge kitchen appliances, custom cabinetry, or hardwood flooring; start with the key components and work from there.
Do Research:
A hard number has been set, and priorities have been declared. Now do some research. Is the plan realistic? What are the average costs for this type of remodeling project in your area? What can be adjusted or tweaked to help cross the bridge from dream to reality? Where can costs be cut if needed?
Get Estimates From Contractors:
Just like shopping for a car, there’s no need to sign the contract from the first dealer. It’s typically helpful to get multiple estimates from different contractors to see how they differ based from the same starting point. Make sure to ask plenty of questions to ensure you’re comparing apples to apples. The meet and greet with different companies and individuals also allows a homeowner to pick a good fit personality and communication-wise. Make sure you’re on the same page for decision making, add-ons, deadlines, and so forth.
With the above steps in mind, anyone should be able to create and stick with an effective home remodeling budget. Be sure to find the right contractor, and to receive an accurate, detailed estimate from them before agreeing to undertake the project.
Editor’s Note: This article was originally published December, 2016 and was updated February, 2023 for accuracy.