Planning A Remodeling Budget: What You Should Know Planning A Remodeling Budget: What You Should Know
Home improvements and upgrades cost money, and a remodeling budget can easily set us back. As long as you know these simple things you will be able to plan an accurate budget.
Draw a Plan
When you are planning a remodel, be specific about what you want. For example, if you are wanting to remodel a kitchen decide exactly what you need. Are you going to replace the flooring? The cabinets? The appliances? The fixtures? You need to know everything you plan on doing and write it down. This will help you determine a more accurate number.
Set an Informed Budget
Write down all of your monthly expenses, and compare it to the income that is brought in to the household. You don’t want every penny you make going right back out in to bills. Writing all of this down will help you figure out what your monthly debt to income ratio is. You don’t want your debts equaling more than 45% of your overall income, especially if you will need to finance the remodel. As an example, if you make $8000 a month, multiply this number by 0.45, then subtract your monthly expenses. The number left over is the amount you can afford each month on your home remodel.
How Much Can You Do Yourself?
Many parts of a remodel can be done without outside help. Flooring, cabinets, appliances, and paint can all be done without hiring a contractor. This can save you money and you only need to budget for the actual supplies. You may want to consider purchasing cabinets that aren’t custom, doing any tile work yourself, and renting equipment rather than purchasing. Custom items will really add up and you can save a lot of money by not going custom. Chances are you can still find something that you like without that added expense. If you want to buff a marble floor, you can rent the equipment at a lower cost than buying or hiring a professional to do it for you. This will allow you to work with a smaller budget, and set money aside from the budget for things that you can’t do yourself like plumbing or electrical work that may need to be done.
When you do hire a contractor, you need to understand that the price they give you is only an estimate. They may run in to issues that will end up costing you more money than they originally quoted. For this reason you need to make sure that the estimate they give you is well under what you can afford. Most experts tell you to add 10% to any estimate for a more accurate depiction of the end cost. Many people will add more to this to be on the safe side. If the estimate is too high or coming too close to the actual budget you will need to trim some things out of the job. Forego the luxury items for now. If your budget included appliances consider using the old appliances until you can afford to add the new ones.
Following these simple tips will help you stay within a budget that is affordable and will help to avoid surprises later on.