A realistic look.
First Job:
Keep it all in perspective!
The best thing to do when budgeting is to keep the cost of your remodeling project in perspective. Look at your monthly debt and your monthly assets again with the new bills in place. Then consider how much you can reasonably afford to take on for remodeling. You may want to wait a few months until you really have a handle on your new finances.
The BIG Question:
How much should you spend?
Of course, you want everything to be perfect now. Who doesn't? But how much "should" you spend? The answer varies by circumstance. It also depends on how much you want to invest into the new home. If you are planning on staying, spend. If you are planning on moving within five years, reconsider the budget. A trimmed budget targeted to high value resale changes would be the best option.
Keep a Reserve
Don't spend every dime you have.
Once you determine how much you can afford to spend on a remodeling job, decrease that amount by 10-20%. This money should be put in a reserve account to cover any change orders or incidental charges accrued along the way, which will prevent a frantic scramble for additional funds at the end of a project.
Be Like Glue...
Stick to your budget!
Once you have the lower budget figure. Stick to it. Keep change orders to a minimum and recognize that phrases like, ". . . while you are _____, could you just ______," can quickly destroy a budget. Any work not specified in the original contract will have a new and additional cost attached to it. Contractors find that "whileyas" as they are called in the industry, can represent up to 10% of their annual volume. Stick to your plan like glue. And be patient. You may need to stagger the work over time and deal with the waiting period to get your perfect home.
Products...
The budget-buster.
Remember that your choice in products will determine the cost of the project. There are many different levels of product quality and many different price ranges. Talk to your contractor about various options to meet your overall goal.
Project Costs
It will vary.
Project cost will vary depending on your location, the size of the room and what features or options you choose. But your best bet to establishing and meeting a realistic budget is to hire a professional remodeling contractor.
A Final Financial Word
It all comes back to money.
You want to remodel your home and not spend your children's college fund to do it. You want to do the entire project on a shoestring budget and end up with a room that could be found on the pages of a magazine.
Good luck! Just kidding. But remodeling can be expensive and it can take time. Be sure you know what you are getting into before jumping in right away. That is a good way to incur debt you cannot pay.
A Little Freaked Out?
Are you thinking about doing it yourself now? In the next section, we will look at the reality of Do-It-Yourself remodeling.
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