Guide To Budgeting Home Renovations

Updated on: January 30, 2023

A clipboard holds a home renovation budget sheet and sits next to a calculator, tape measurer, and some cash.A clipboard holds a home renovation budget sheet and sits next to a calculator, tape measurer, and some cash.

Planning a home renovation is an exciting, yet stressful, time. From choosing materials to choosing contractors, there are many decisions to be made. However, one of the most significant decisions you will need to make is deciding on your budget.

The typical is $12,567 to $34,962, according to HGTV. A home renovation can be something as small as a kitchen renovation, or it can be a project that includes the entire house. As you budget for your home renovation, you will need to make a plan, consider unforeseen costs, and decide on different cabinets, flooring, and other materials. 

No matter what your dream is, here are some tips for budgeting your home renovation.

Plan Carefully

Setting a budget ahead of time and making a plan for your renovation is one of the best ways you can manage your money. You want to make sure you understand the scope of your project, the materials needed, and how much money it will take to complete.

In the event of a common kitchen remodel, you’ll need to ask yourself and deliberate on functionality, style, storage, and more. A fair amount of measuring, even when you hire a professional, will need to be conducted on your end when determining what cabinets you want — a large aspect of a kitchen remodel. Larger projects like this, with their own unique considerations, will require calculated decisions on many levels.

As you are planning, you will also want to have an idea of how long the project will take. Be sure to keep in mind that accidents do happen, so have a flexible schedule.

Consult Professionals

Consulting professionals is a very important part of doing a home renovation. You will need to talk with different people who understand the various aspects of your renovation. Each one can help give you an overview of what to expect during your project before you get started.

This can include architects, plumbers, electricians, and even interior designers. A kitchen designer, for example, can help you create a blueprint floor plan based on intended uses, as well as source appliances and labor. Additionally, they can provide thorough and detailed quotes that make it easier for you to stick to your intended budget. While kitchen designers can help you virtually visualize your new and improved kitchen using 3D renders, you can get started on a design yourself with a user-friendly planning tool like Create-A-Kitchen.

As you start having conversations with these different professionals, make sure you factor the cost of their services into your budget. For example, the average cost of a plumber’s services for a kitchen renovation is $4,000 to $7,000. 

Set a Limit

One thing you absolutely must do is set a limit for your budget. This is your upper limit for spending, and you need to be strict about not going over it.

One way to set your limit is to find your ideal budget. This is the amount you will spend if everything goes right and there are no problems during the renovation. Now, add several thousand — if not more, depending on the size of your renovation — for unforeseen circumstances. This is the amount you will be able to spend if there is an emergency or unexpected mishap, such as a massive water leak or a snowstorm preventing renovations.

Setting your upper limit is about deciding what you can afford in the worst-case scenario. If nothing bad happens, you can take that extra money and put it into getting the tile you wanted for your backsplash, or put it back into your savings account. 

Itemize Your Budget

Itemizing your budget is a great way to stay on track with finances during home renovations. The last thing you want to do is be general and vague when you write down your project budget. This will only cause you to go over budget and lose track of how much money you are really spending.

However, if you write out the exact items you are purchasing and the services you are acquiring, it will help you to stay on budget as the project moves forward. It will also help you to keep track of unanticipated costs or changes.

Be Discerning With Bidders

While it might be tempting to go with the first contractor you speak with, it is a much better idea to wait for multiple bids. Getting multiple bids allows you to evaluate each contractor and their price point to find the best option for your house and your budget.

When you are assessing bids from contractors, make note of their communication, their past experience, their plans for your home, and the price point. Using these criteria and any others that are important to you can help you to find the best contractor for your home renovation.

Read Reviews

When in doubt, always read the reviews. This rule applies to many different parts of your home renovation. When you are looking at different materials, such as your hardwood floors, looking at online reviews for your different options can help you to find the best one for your home.

When you are looking for a contractor, reading reviews can help you to weed out contractors that might not be best for your home project. You can see how the contractor did on other projects, how they worked with past clients, and how the projects turned out in the end.

DIY When Possible

While some things need to be outsourced, there’s plenty you can do for your home renovation all on your own. It is important to note that projects involving electrical work and plumbing may not be best for DIY.

There are many projects you can do as DIY or partial DIY. If you want to cut labor costs, you can help your contractor knock down walls in your home for a more open floor plan. If you want to handle a project completely on your own, you can paint all the walls in your home, pull up old carpeting, or install a new faucet for your kitchen sink.

Prepare for Hidden Costs

You should always expect the unexpected. With a home renovation project, things rarely go exactly according to plan. While it is important to have a plan, it is also important to prepare for hidden costs and unforeseen difficulties.

For example, your contractor may find evidence of water damage and rot in the basement you were hoping to renovate. This means that you will need to cover the costs to fix the water damage before further renovations can occur.

By anticipating these hidden costs, you can create an emergency fund within your renovation budget to cover the problems that do occur. 

Consider Off-season Renovations

One way to save money is to consider off-season renovations. Many people choose to renovate their homes during the spring and summer. However, by renovating your home in the colder winter months, you can save money in a variety of ways.

Contractors are less busy in the winter, so you’ll be able to find the perfect qualified contractor for your project without having to compete with another family. The contractor may also charge lower rates in the off-season. If you are buying appliances and other large purchases, you may also benefit from the sales discounts and deals that happen during the holiday season.

Utilize Reclaimed Materials

One way to save money — and the environment — during your home renovation is to utilize reclaimed materials. These include items that are manufactured from recycled plastics and other materials. You can also look into using salvaged materials to create something completely new from used parts.

By utilizing reclaimed materials, you can limit the cost of materials within your budget. You are also able to help your home renovation project be more eco-friendly.

Consolidate Projects

Instead of doing one individual project at a time, consider consolidating projects for your home renovation. Completing projects at the same time can save your contractor time and can save you money.

Instead of doing the floors in your living room one month and waiting to do the floors in your bedrooms in the next year or so, you may choose to do all the floors at the same time. This would mean that you can buy the flooring material in bulk for lower material costs.

Sell Removed and Excess Items

The items removed from your home or left over from your renovation project can be sold to people in your local area. This can include excess flooring, tiles, wiring, and other goods. You can consider selling these goods on an online marketplace, at a local swap meet, or directly to your contractor for use in a different project.

Look for Alternatives

You do not always have to go with the most expensive option. Finding cost-effective alternatives can help you to stay within budget while achieving the aesthetic and comfort level of the home of your dreams.

While you may have your eye on designer tiles, if they cause you to go over budget, you may have to find a more cost-effective option. There are many artists and craftspeople online, including on websites like Etsy, where you can find beautiful, handmade items that might be more within your price range. You can also repurpose items in strategic ways with a little finesse and resourcefulness.

With the right planning, budgeting, and foresight, you can complete the budget home renovation for your dream home.