Whether you’re tackling your first home remodel or your tenth, there’s always something new to learn about budgeting for the project. With a little planning and the insights shared in this article, you’ll gain a clearer understanding of the budgeting process—and discover practical strategies to save money along the way.

As a homeowner, it’s important to realize that only you can fuel the ambition your team has for saving money. From the beginning stages of finding a remodeler to the process of selecting materials, you have endless opportunities to get involved in the remodel to stick to the budget as planned.

Set a Realistic Budget for Labor, Materials, and Permits

Many variables go into the cost of a home improvement project. As the homeowner, it’s your responsibility to define how much money you’re willing to pay for an interior or exterior remodel. Keep in mind that there are several costs including labor, materials, and permits.

Will you be comfortable paying off your kitchen renovation if your hot water heater needs to be replaced at the last minute? Deciding on a budget for your home remodel is one of the first and most important steps in the process.

Plan a Buffer for Unexpected Costs

As a general rule of thumb, homeowners should plan their budget with a 10-20% buffer for unexpected costs. For a small home renovation such as new flooring in the living room, you can plan a smaller safety net of approximately 10% in case labor hours or product costs increase. For something as large as new home siding, play it safe with a 15-20% margin in case the remodeler finds something like water damage beneath the surface of your existing siding.

Gather Home Remodeling Estimates

While a budget is a great first step, it’s impossible to know how much a project will cost without quotes from home remodelers. Begin the process of gathering at least three estimates from qualified remodelers in your area. With three or more quotes to compare, you’ll be able to tell if one business is quoting your project too low or too high.

A project that’s quoted too low may indicate that the remodeler is not thorough enough in analyzing costs, while a quote that’s too high may include luxury products that you don’t need. From here, you can reevaluate your plan based on the average cost estimates to formulate a more realistic budget.

Find an Affordable Home Remodeler

With the estimate process complete, assess which home remodeler will be a good fit for your budget. With your sights set on cost-effective solutions, consider hiring a business that advertises affordable products and services rather than luxurious home improvements. Of course, low pricing shouldn’t come at the sacrifice of quality. Hire a skilled laborer who communicates expenses effectively and is willing to propose cost-saving measures.

Hire Skilled Labor to Prevent Issues

Make sure the home remodeler you hire for your affordable house renovation has applicable experience to the project to ensure seamless results. The last thing you want is to have to pay thousands of dollars in repairs because your home contractor was underqualified for the project.

Ask Your Contractor to Communicate Expenses

While some homeowners with more lavish budgets may not want to hear about every little expense, your contractor should be aware that you have a budget to stick to. Open communication about saving money will make your home remodeler think twice about reusing parts instead of purchasing new ones.

Request Cost-Saving Techniques

Another way to keep costs low during your home renovation is to ask your contractor for budget-friendly recommendations. Are they able to purchase products in bulk to save money? A great contractor should be willing to work with you to find solutions.

Figure Out Your Financing Options

Once the process of putting together a budget and gathering estimates has been completed, you’re in a great position to start researching financing options. Whether you’re budgeting for your remodel using savings or financing the payments, it’s crucial to plan funding for your home improvement project. Here are some of the most common financing strategies for homeowners:

• Home Equity Loan: This type of loan allows you to borrow against your home. A home equity loan is typically preferred for larger home renovations.
• Home Equity Line of Credit (HELOC): A HELOC is like a home equity loan with a line of credit. This also borrows against your home, but you only pay interest on money borrowed.
• Cash-Out Refinance: A cash-out refinance replaces your existing mortgage with a larger one to cover renovation costs. This could extend your mortgage loan term but may come with a lower interest rate.
• Personal Loan: A personal loan can be borrowed from any money loaning institution but it often comes with the downfall of larger interest rates since your home is not on the line.
• Contractor Financing: Contractor financing is common for home improvement projects as the remodeler often partners with lenders to make the process easier for homeowners.

Research Comparable Homes in Your Area

During the initial budgeting phase of home remodeling, making an informed decision regarding the return on investment is crucial. Begin by researching comparable homes in your area and, if possible, find out how much a roof replacement, kitchen remodel, or bathroom renovation increased the value of a home sold recently. This should build your confidence when planning your home remodeling budget.

Plan Your Remodel in Stages

One way to stick to your home renovation budget is to plan your remodel in stages over months or years. For example, pay off your kitchen remodel before tackling a bathroom renovation as this can keep you from going overboard on expenses all at once.

If you’re having trouble picturing this process, simply ask yourself what renovations you need and what ones you want. It may be best to move forward with the essential projects before splurging on more down the road. This approach allows you to prioritize key upgrades while giving you time to save for the next phase, ensuring your budget stays on track.

Spend When It Counts the Most

When creating a budget for your home remodel, cut costs where you can while investing where it counts. For example, if you’re considering upgrading to a higher-quality product that’s more durable during your roof replacement, it may be a smart investment because you’ll avoid costly repairs in the future. However, upgrading your stove to a more expensive brand during a kitchen remodel may not align with your low-cost home renovation goals.

Don’t Deviate from the Plan

In the excitement of the renovation, it’s easy to feel like it’s a “now or never” moment when tempted to upgrade to a more expensive product. However, it’s important to remain neutral during the process to avoid running up your bill with upgrades here and there. In some instances, it may be warranted, but other times, it’s better to say no to yourself to save money.

Be Flexible With Product Availability

Sticking to your inexpensive home remodel may require some sacrifices. If you’ve had your eyes set on a specific brand and style of windows that have recently gone up in price, consider alternative products during your window replacement. Products and materials make up about 40-50% of the home remodeling cost. The products you choose to install can either help you stay within your budget or push it beyond expectations.

Find a Budget-Friendly Home Remodeler Using Our Comprehensive Network

Now that you’re equipped with expert budgeting tips and strategies, it’s time to take the next step in your home renovation journey. Start by setting a realistic budget, gathering estimates, and exploring your financing options. Remember, careful planning and smart decisions can turn your dream remodel into a reality without breaking the bank.

Don’t risk your home remodel costing extra because you couldn’t find the right contractor. Use our thorough network of home remodeling professionals near you to be matched with the right fit for the job. Whether you’re planning a new kitchen, bathroom, or exterior, we have a qualified home contractor standing by to get started on your project. Begin your search today!