Creating an ideal budget and sticking to it throughout the renovation is every homeowner’s dream, but it is not always a simple task. Renovations are very variable and unless you’ve created a detailed plan, it is very easy to get lost in all the costs and fees that go along with it, going over your budget very early in the process.
In order to stay on top of your budget and keep the renovation under control, all you need is a little planning and due diligence and your renovation process will go smoothly and successfully. Here are some of the best tips on how to be one of the few lucky homeowners who know how to stay on budget.
Make a Detailed Plan
One of the most important things that will keep you on track and on budget is planning everything in detail. This means that you should dissect your home renovation project into smallest of details and be as specific as possible with every aspect of it. This is important for two reasons.
First, this will help you determine which aspects and parts of the renovation are the most important, where you absolutely cannot cut corners, and which are slightly less important, where there is some room for negotiations and compromise.
After that, you can create your budget plan according to your main objectives, allocating the necessary amounts of money for each of the priorities. Then you can go on to the negotiable features and see how and if they fit into the budget.
Second, it is very important to get specific with your plan and list all the steps and features so that your contractor can give you as detailed and as realistic quote as possible. When you don’t give the specifics to your contractor, you will get a quote and then they will come back with a significantly different, i.e. higher estimate because they had to come up with the specifics on their own. And it is probably not what you want nor is it likely to fit into your budget.
Laying out the specific plan to your contractors and including all the details allows them to give you a very realistic quote that will be very close to the final bill. This way, while searching for contractors and comparing different quotes, the only variances will be their fee and the cost of labor.
Keep the Changes to a Minimum
It is crucial to stick to the plan and try not to introduce further changes to it, especially when the renovation is already underway. You may get inspired to do more, see something that you didn’t before while standing in the middle of a kitchen that is being remodeled, for example, but it is not a good idea. Just remember the detailed and very specific plan that you came up with beforehand – you have probably spent some time on it and chances are that you have already included everything that needs to be done.
Adding more features or additional work just because the room is already torn apart is not a good enough reason and it is usually why most homeowners go over-budget. With changing your mind midway and adding more things on your to-do list you will slowly lose control over the whole project, go over your budget, and the costs will just add up. The contractors themselves may not even know what the exact cost will be with all those changes, so you might be in for a surprise at the end of the day.
Sticking to the plan as closely as you can is the safest way to prevent going over-budget and making sure your project goes smoothly. And all of those changes and side projects that you have come up with can be done some other time, with a carefully designed plan as well.
Always Plan for Contingencies
While you are doing your best to keep the project on the right track, as planned, there are nearly always some unexpected and inevitable glitches or changes in the plan, such as bad or old electrical wiring that needs to be replaced, dangerous asbestos, and similar things. They may not even be big ones, but when they pile up, they may significantly affect your budget. That is why you should always plan for these contingencies and calculate them into your budget from the get-go.
Experience and practice have shown that the best way to do this is to add 15-20% on top of the estimate that your contractor has given you for the project. It may sound like a lot, but it usually what the contingencies amount to.
If you, on the other hand, don’t have the budget to accommodate that amount, then you may have to think about the ways in which you can scale down the renovation. You can go over your plan once again and see where you can save some additional money or think about using lower cost materials, for example, purchasing products and materials on your own, etc.
Always Be Realistic
All in all, it is primarily important to be realistic about your budget – don’t set it too low. Many homeowners go into this process very optimistic about the costs, thinking that they can get away with a lower budget, only to be faced with the harsh reality in the end.
Some people decide to cut corners but DIY-ing some of the renovation, thinking that it could save them some money. This often turns out to be a costly mistake because people are sometimes unrealistic about their skills as well. They believe that they can do some of the work themselves, but this, in the end, turns out even more expensive because, more often than not, contractors have to do it all over again.
Planning and setting a realistic budget will help you prepare for the entire process and save you the unwanted surprises and additional costs. But for that to work, it is important to know what your skills are, what you are capable of doing yourself and what not. It is important to do some research and find out how much a professional renovation contractor will cost you, as well as list out a step-by-step plan of what you want and need done with high and low-priority features.
Planning a renovation project and the budget for it is no easy task, but with these essential tips, you will be more than prepared to tackle your project while staying on-budget the entire time.