How to Stay on Budget When Remodeling
Did you know that almost one-third of homeowners begin remodeling projects without a budget? According to the Houzz & Home 2016 Overview, another third of homeowners go over budget with 11% of those going 25% or more over the budget! Clearly, the budget is a stumbling block for remodeling.How can you avoid this pitfall? Read on to learn from the mistakes made by others.
What’s Wrong with Not Starting with a Budget?
You’ve watched enough home improvement TV shows to know that things never go as planned in a renovation. But that’s all the more reason to have a budget. Rick Goldstein, architect and co-owner of MOSAIC in Atlanta, told U.S. News that all renovation projects should budget in 10% extra for the unexpected. That said, you’re almost guaranteed to spend more money than you’re planning on—whether or not you wrote it down in a budget.
With 21% of homeowners paying for at least some of their remodeling with loans and credit, and 82% dipping into savings, overspending could have long-standing ramifications.
Why Do Renovations Go Over Budget?
There are many reasons remodeling gets out-of-hand. But the biggest reason, according to Houzz & Home is that homeowners decide to purchase products and materials that are more expensive. They choose to go over budget! Once you see the walls ripped out, you may have a change of heart too. The sentiment to do it right the first time settles in and you might want to pick different materials because you realize that this is a one-time thing so you better get what you want. This is reflected in another big reason for blowing the budget: changing the scope of the project or modifying the design.
How to Stay on Budget?
For those who do stay on budget, their secret is one anyone can replicate. 31% of home remodelers said that their general contractor, builder, or kitchen and bath remodeler was key in helping them stay on budget. And the percentage is even higher for homeowners who employed design-build companies.
If you’re dedicated to staying on budget, start by creating that budget with a 10% buffer. Then hire a contractor (or other building pro). Next strike a balance between what you want and what you can afford. Lastly, stick to it. Don’t be tempted to modify the project more than your 10% buffer will allow.