Use These Steps to Budget for Your Next Home Improvement

Does your house need a makeover? As much as you may have loved your home when you first purchased it, the years you’ve spent living in it has created some memories, and some wear and tear. Home improvements like painting, kitchen and bathroom upgrades, as well as additions or add-ons, not only make the home look better, but also help to drive the value up. If you’re planning to renovate your home soon, you’ll want to follow these budgeting steps.

Get an Idea of What You Want

Before you can determine whether you can afford a home improvement project, you’ll first need to understand what you want so you can get a ballpark idea of what it would cost. Though any improvement is better than none, some home improvements known to increase property value include:

  • Deck or additional patio space
  • Upgraded kitchen and/or bathroom
  • Room addition
  • New roof

There are also smaller jobs you can do to update the aesthetics of the home like painting the interior and exterior of the home or updating the landscaping.

Get an Idea of Costs

Now that you’ve chosen the projects you want to work on, you can do some research to determine how much you’ll need to get the job done. The best way to accomplish this would be to contact local contractors who specialize in the home improvement jobs you want to have done. Discuss your ideas and have them do a view of the home and provide you with an estimate. You should get at least three different estimates to ensure you’re choosing the best rate.

Can You Afford It?

Based on the estimates you were provided; can you afford the home renovation? Since most major home improvements can cost thousands of dollars, unless you’ve been saving for a while, you likely don’t have the money to afford the renovations on your own.

Homeowners who want to improve their homes do have options, however. One option would be to search for a mortgage company that would give you a loan. Cash-out refinance loans, second mortgages, home equity loans, and home equity lines of credit could be reasonable options to secure the cash. These options, however, should only be considered if you have the means to repay the loan. As the loan will be attached to your home for collateral, should you default on it, you’ll lose your home and all the hard work you put into it.

Dreams Vs. Budget

If you’re not in the best position financially, there’s not much equity in your home, or you still won’t have enough for the home renovation, you can find ways to budget and cut costs so that you can afford the improvements. Here are some tips below:

Trim the fat – The first bit of advice would be to review your budget and get disciplined about sticking to it. Review your income to expenses and find ways to trim the fat on your budget. If there are things you can remove or reduce to save money for your home improvement, do it.

DIY – Depending on what you want to have done in the home and your level of skill and comfortability, you can do many home improvement jobs on your own to save on labor costs. Things like painting, updating the landscaping, and even small kitchen and bathroom upgrades can be done with the right tools and references to guide you.

Consider low-cost alternatives – Though you may have imagined granite kitchen countertops, scaling back and finding affordable alternatives can be just as attractive. Choosing laminate countertops, for instance, can save you hundreds of dollars, but give the same chic and timeless look you were dreaming of.

Refurbish some things – Instead of getting all new kitchen appliances or living room furniture, see what you can salvage to save you some money. You’d be surprised how you can bring kitchen cabinets back to life with a little sandpaper, paint, and new handles. This would eliminate the need to buy new kitchen cabinets but still give the room a facelift.

Buy the supplies yourself – Homeowners can save a lot of money on the cost of home renovation projects by purchasing the parts and supplies themselves. Talk with your contractor to ensure that you’re getting the right products.

Figuring out how you’d like your dream home to look is easy, the hard part is figuring out how you’re going to afford it. Whether you’re doing improvements to sell the home or you just want to give your home a makeover, there are options for making your home look great. Before getting involved in any home improvement project make sure that you have a financial plan that includes getting estimates, finding a source of cash, and budgeting. If you’re not able to afford it now, try doing one project at a time and before you know it, your home will look just the way you dreamed it would.