Keep Home Renovations Costs from Breaking Your Budget

By Julie Jaggernath

Home renovation costs can be hard for anyone’s budget. Maybe you’re planning to live in your house for a while, or maybe you want to increase its selling value. Many people start home reno projects with great ideas and clear goals. However, you only have to search online or ask an experienced friend to see how even the best plans can fail. Here are tips to remodel without regret.

Identify Your Renovation Project and Shop Around for Good Prices

Before you start, figure out what renovations you want to make to your home. Then shop around for the best price and value for what you want. Get several price quotes from different stores and/or contractors, check online reviews, call references, and view samples or tour finished projects if possible. Also talk to friends and neighbours who have recently done home renovations. Ask what went well and what they would do differently next time.

While all of the research might feel like a whole project of its own, it’s worth the time and effort. It will let you see where you can save money and where it’s worth spending a little extra. It’s okay to break your dream renovation project down into smaller projects so that you don’t break your budget. Hold off on opening your wallet until you have all the information you need.

Think Twice About DIY Reno Solutions

Doing part or even all of the renovation yourself can save a lot of money on labour. However, investing sweat equity means you’re saving money at the cost of your own time and responsibility. Ask yourself these questions to help decide if a DIY (do-it-yourself) solution for your renos is right for you:

Budget for Renovation Costs and Unexpected Expenses

The cost of a home renovation can break your budget if you’re not prepared. According to information released late in 2022, it was reported that homeowners expected to spend an average of more than $25,000 for home renovations from March 2022 to February 2023. What you can afford to spend depends on your budget, not what others have or plan to spend. One choice to make is whether you’ll use your savings or borrow money from credit sources like a home equity line of credit. Going into debt will of course bring its own list of problems, but so will leaving the job unfinished because you ran out of money. A blended budget that uses both savings and borrowings might be your best strategy.The cost of a home renovation can break your budget if you’re not prepared. According to information released in 2022. a 2019 CIBC poll, Canadians planned to spend around $10,000 on average for renos. What you can spend depends on your own budget. One choice to make is whether you’ll use your savings or borrow money from credit sources like a home equity line of credit. Going into debt will of course bring its own list of problems, but so will leaving the job unfinished because you ran out of money. A blended budget that uses both savings and borrowings might be your best strategy.

Where to Find Money to Save

If you’re okay with putting off renovations until later, then you can always set a saving goal to come up with the money you need. Your remodeling might be finished in a few days, but that doesn’t mean you need to save all the money for it in that time too. The farther you think ahead, the easier it will be to build your renovation fund. For example, if you put away $50 a week, then in 2 years, you’ll have $5200 to spend!

Unfortunately, even if you know exactly what you want to renovate and got your price quotes for it, things could still end up costing more than expected. Just as it’s a good idea to have emergency savings ready for life’s unwanted surprises, you want to leave some room in your renovation fund for extra expenses. Also, before you start with any renovations, decide what you’ll do if you go over-budget. Pinterest has a way of making our dream renos grow well beyond our budgets. By deciding ahead of time what your contingency plan is, you’ll be in a better position to separate the emotional decisions from the financial, should a problem occur.

How to Save Up for a Big Expense

Balance What You Want with What Your Home Needs

Everyone wants their home to be a certain way for themselves and their families, but that shouldn’t come at the cost of what they need. It’s not worth buying stainless steel appliances and running out of money for necessary home maintenance. A new kitchen is great, but if the roof starts to leak, then it will be hard to cook. If you live in a strata building or complex, with insurance rates as high as they are, it can be worth spending your renovation dollars on upgrades and maintenance before the creature comforts. It’s also important to keep balance in mind. For example, if you spend everything on renovating your bathroom, then what about the other rooms, the hallways, and the outside of the house? Will the bathroom still fit with the look of everything else, or will it seem awkward and out of place?

Before you get what you want for your home, make sure you know what your home needs – and then take care of the needs first. If you have money left over, that’s when new gadgets and styles belong on your shopping list.

Should You Downsize If You’re in Debt?

What to Do When Home Renovation Costs are Causing Budget and Debt Problems

Renovating your home into one that you and your family loves is a great feeling, especially when costs are under control. However, if you’re facing an unexpected bill after doing your renovations or need extra support with budgeting, we’re here for you. Reach out to us, and one of our experienced credit counsellors will be happy to help you solve your debt problems so that you can focus on enjoying your improved home.

Last Updated on May 14, 2024