Figuring Out Your Budget

Figuring Out Your Budget

We cannot stress the importance of setting your budget up front with your contractor and knowing that because of the artisan nature of the trades, not all companies are an apples-to-apples comparison where price is the only difference. Money is important, but it isn’t everything – don’t fall into the trap of treating your project like you would looking for a deal while shopping for everyday products on the internet. When establishing a budget, you should ask yourself a few questions:

Are you going to be living here in 5+ years?

If so, it might make sense to buy nicer materials that have a stronger personal touch which you’ll enjoy more. If you’re going to get 5-10 years of enjoyment out of that extra-deep whirlpool tub you’ve always wanted, then the $2500 upgrade cost might just be worth it, even if you won’t get all of it back in resale value, you’ll enjoy it for a decade. If you’re looking to sell your house soon, then you’ll probably want to go with a more budget-conscious remodel where materials are comparable to the neighborhood in which you live and all the basics are covered. While staying conservative is the rule of thumb when selling a property soon, there is also something to be said for what salesmen call, “surprise and delight.” Sometimes that whirlpool tub might be enough to be the difference between this house and the other one down the road without one. You can add in a few items that really give the home some appeal without going overboard. The bottom line is that if you’re moving out, you have to be reasonable, and keep things neutral and cost-effective without being boring.

Can you afford this?

I can tell you right now that you can’t do a full bathroom remodel for less than $6,000, and kitchens typically start around $12,000, assuming you’re changing out more than just one or two aspects of them. For most people, including myself, the harsh reality is that they don’t have $10,000+ disposable dollars in the bank at any given time. Typically, that money is set aside for retirement, college funds, emergency funds, etc. If you have good credit, despite your financial commitments, then you can still get it done, but if you’ve got $800 saved up and maxed out credit, then you’ll need to get some stuff straightened out before seriously considering a remodel. You’d be amazed at how many people on CraigsList expect stuff like new kitchen cabinets and countertops in the neighborhood of $500 installed! If you’re down to the felt, however, you can go the DIY route as well, and we offer many resources here for that. Learn more about credit and loans.

Should you do this all at once, or do a little bit at a time?

A common strategy of homeowners with a limited budget is to parse a job up into sections, for example, we’ve had customers that want to do the countertops and backsplashes this year, save some more money, then get the cabinets refinished, then save more money, and finally take out that wall they hate and get the floor redone. This costs more money in the long run than simply taking out a loan and getting it all done, and also it is considerably more stressful because it extends the time you have workers in your home. The contractor has to set up new floor, wall and dust protection for each project. They have to make extra trips. They have to go to the extra trouble of protecting and working around the new products that have just been installed. Believe it or not, on a given day, a remodeler can easily spend 2 hours just getting set up and cleaning up.

Could I save money by doing something myself?

This is a yes and no situation. If you do a good job, then yes. If not, then we have a saying for that. “A project, like a chain, is only as good as it’s weakest link.” No matter how nice everything looks in a new project, if the trim was reused and was all beat up, that’s all people are going to see. If the grout lines on a tile job are 95% perfect, people are only going to see the 5% that are crooked. Also, if a contractor has to break off of the job so that you can do the plumbing or the electrical because you thought the quote was too high, it’s not uncommon for them to charge you an inconvenience fee for having to deal with someone else’s work, or a trip charge for the extra commutes.

Helpful Links:

DIYChatroom
GardenWeb Home Forum – (the site is antiquated, but there’s some good DIY advice on there.)

Know your limits.

For example, everyone thinks they’re a painter, but nothing kills that brand new room like a bad paint job. If you don’t have experience with painting, then the room you just spent $10,000 on to make look good might not be the best place to start. It’s a good idea to know your capabilities. For instance, if you’ve painted several rooms before with good results, great. If you’ve just seen it done on HGTV and it looked easy, trust me, it’s a skill that is developed over time and not everyone is a natural.