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How to Budget Home Renovations - Save Money

Updated on June 18, 2013

Renovations require a budget


Home renovations and improvements are classic ways to improve your home space, and are also significant alternatives to selling and buying a new house. In a struggling real estate market, it often makes more sense to change the home you live in rather than go through the trying process of going to market, a lousy market.

This article is about home renovations and budgeting. It is based on my experience after purchasing a big 162 year old house three years ago. I'm not writing this article because home improvement budgeting is something I'm good at; I'm terrible at it. But sometimes things that one is terrible at gives one the ability to warn others to avoid the same mistakes.

Everybody knows that we should budget for home improvements but why do so many projects go beyond the budget? The answer is simple. It was given to me by a friend who is a home improvement contractor. Here is the answer: "We may as well." Those four words have destroyed more home improvement budgets than a plague of termites. "The carpenters and other trades people are here so we may as well" (rip out a bathroom, redo the kitchen, finish the basement, etc., etc.) That's how to kill a budget. Spouses are often at loggerheads over home improvements and the arguments are seldom about the color of paint but about the budget.

The Formal Budget - The Business Plan for Your Project

I can't emphasize enough that a home improvement budget should be formal, in writing and loaded with fine detail. This is true weather you are a do-it-yourselfer or you hire a contractor. Approach the budget as you would a business plan. Without a plan a business flounders from event to event, missing opportunities and making mistakes. The plan should be completed before you hire a contractor or buy the materials to do it yourself. The plan will be on paper or a computer file, not carved in stone. It can be amended, and that's exactly how you should approach it. If you decide on a change, put it into the plan with a note explaining why you decided on the change. The numerical parts of the plan should be on a spreadsheet such as Excel. This enables you to make changes and see how it affects the bottom line. Both partners should sign and date the plan to emphasize the importance of the project.

The Things to Plan For, Including the Things to Avoid

We fell in love with our big old house as soon as we saw it. Built in 1847, it had what many refer to as "good bones," that is, a solid infrastructure upon which to renovate. It also had some great history that appealed to my wife and I. It was once owned by Fred Astaire, one of our favorite entertainers. The house was built by a man who was also one of the founders, in the year that it was built, of our church. It has over 6,000 square feet of living space with six bedrooms, five bathrooms and seven fireplaces. It was in sore need of renovation. We had sold our prior home at a good profit and we were flush with cash, too much cash. Our budget consisted of a rough idea about how much to spend. The cash behaved accordingly: it disappeared.

Does it have to be done NOW? Unless there is a safety issue, many parts of a project can become the parts of another project or phase of the existing one. Of our seven fireplaces, we only use one regularly and two others occasionally. That leaves five fireplaces that did not have to be cleaned now, or ever. Why pay to have a fireplace cleaned that you never use? We cleaned them all. Just because a crew is on site that does not mean that you have to solve every problem with your house now. Contractors charge based on the amount of time required. They charge for "extras," items that were not in the original estimate.

Slap Dash - What's wrong with that? There were some rooms in the house that needed only a little spackle and paint, but we didn't want them to look like they were done on the cheap. But what's wrong with cheap? A little sand paper and paint, and you have a room that can look decent for a couple of years. This is a can worth kicking down the road. Look at your budget/plan for items that can easily be done with a minimum of effort and expense. So did we do a slap dash treatment to some of the rooms. No. We redid them all. Budget, what budget?

A vent is a hole in the floor. Cover it.


Open walls and ceilings - What goes in there?


Do you budget for home improvement projects and stick to it?

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Some Specific Items to Think About in Your Renovation Plan

Cover Air Conditioning Vents. This may sound so simple that you wonder why I bring it up. Keep in mind that trades people, no matter how skilled they are at what they do, often overlook simple things that make a project better. This includes the general contractor, whose job it is to watch over every detail. As the general contractor, the subcontractors and his employees are his agents. Everything they do is his responsibility. As our renovation was winding down in the month of August, we decided to turn on the air conditioning. A toxic cloud emerged from every air conditioning vent. Nobody thought to cover the vents during the heavy construction. A simple piece of cardboard taped to the floor would have done the trick. It took a day of vacuuming out debris from each vent in the house, something that could have been avoided with a little attention to detail. Visit the site often to make sure that the little details are covered.

Open Walls and ceilings. If you need to take down a wall or put up a new one, STOP AND THINK. Should you put something into those walls before they are closed up. Stereo speaker wire is a perfect example. Our completely renovated kitchen abuts a wall, the other side of which is a large living room where we do a lot of entertaining. The adjoining wall was open for weeks. We have an excellent stereo system in the living room. A little forethought would have led us to wire the wall so that we could have speakers in the kitchen/den. Always remember, and put it into your plan: If a wall is open, should something (speaker wire, a window, a hatchway or a door) go in there. It is cheap to accomplish this when the wall is open.

Toilets. An old, poorly operating toilet can turn into an expensive plumbing job if not taken care of. If it's just old but operates properly, leave its replacement for another project, perhaps simply changing the seats for now.

Leaders and Gutters. Water infiltration can cause all sorts of problems, from unhealthy mold growth to a rotting foundation. Bad leaders and gutters are items that should be in your plan. If they need fixing or replacing, do it now.

Electricity. Electricians have a word for old wiring: it's "tired." If part of your renovation comes across rooms with tired wiring, ask yourself if that room will require a lot of juice. Discuss this with the electrician. If you have no need for an air conditioner or other item that requires a lot of amperage, this is something that can be left for another project. Put it into your plan.

"Under Construction: Pardon Our Appearance." How is that for a useful sign? Some people feel embarrassed that a particular room needs renovation. Why not place a tasteful sign in those rooms, letting visitors know that the project is ongoing? Websites do it, businesses do it. Again, don't think that you have do it all now.

Be hands on. As discussed above about the uncovered air conditioning vents, your presence is required. Don't expect the construction workers to be as thoughtful as you. Ask lots of questions, especially this one: "Are there any problems I should know about?" You don't have to be on site all of the time, but visit often.

"We may as well do it while the workers are here." Those budget killing words should be placed prominently into your renovation plan and budget. It's very easy to let your emotions take over and picture how lovely that room will be when it's renovated, or what a nifty idea it is to clean fireplaces that you will never use. Commit yourself to writing a budget and a renovation plan. But putting it all down on paper is only the beginning. The key is to follow the plan and to keep within the budget.

Copyright © 2012 by Russell F. Moran


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    • profile image


      4 years ago

      Nice article about home renovation , Keep sharing more article .

    • rfmoran profile imageAUTHOR

      Russ Moran - The Write Stuff 

      6 years ago from Long Island, New York

      Thanks greatstuff. Yes, contractors are great salesmen.

    • rfmoran profile imageAUTHOR

      Russ Moran - The Write Stuff 

      6 years ago from Long Island, New York

      Thanks Sis. I think going beyond budget is a default setting for most people.

    • greatstuff profile image


      6 years ago from Malaysia

      I agree with you that we tend to do the ' we might as well..' I do that most of the time. Contractors are good in convincing you to do it now, as it is 'cheaper' to combine all these small odd jobs together. Enjoyed reading this posting. Voted up and useful and shared.

    • Angela Blair profile image

      Angela Blair 

      6 years ago from Central Texas

      Like you, I've done a couple of old, old houses over the years and without forethought they're death to a budget. Your suggestions are wonderful -- and absolutely necessary -- to enjoy the end result of renovating an old house without thinking of the glaring and expensive errors you made. I certainly made a bunch on the first one -- by the time I got to the second one I'd wised up a bit -- and enjoyed the house a whole lot more! Best/Sis


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