All Things Home Renovation Budgeting!

One of the biggest challenges of renovating your home is managing a realistic budget. It’s easy to get caught up in the excitement of picking out new fixtures, appliances, paint colours, tiles, you name it. But, oftentimes, homeowners fail to create a budget that actually works. So before you get carried away knocking down walls, tearing up floors, and slashing countertops, please please PLEASE, make a solid plan. 

In this step-by-step guide, we’re going to walk you through how to plan you renovation budget. We’ll cover absolutely everything – making it nice and easy to stick to your budget. So, put on your hard hat and let’s get started!

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Assess Your Home Renovation Needs

Before you get into budget creation, let’s first take a step back and really assess what you need for this renovation. 

Start by making a list of your renovation goals. Do you want to expand your living space? Maybe update your kitchen with new appliances and a cleaner backsplash? Or maybe your goal is to create a new bathroom on the main floor? When you’ve got a clear idea, you then need to begin to prioritize. 

This is tricky for a lot of people, but it’s crucial, you have to make a “must-have” list versus a “nice-to-have” list. Your “must-have” list should include any essential and non-negotiable items you need to achieve your renovation goals. The bulk of your budget will likely go towards these items.

Your “nice-to-have” list should include items that are desirable but not essential. This list can be fun to make, you can dream big and put down all the things you’d love to have in order to make the space uniquely yours. You can live without these items, but if budget allows for them, you’d love to incorporate them.

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Establish A Budget You're Comfortable With

To establish a budget, start by looking at your current financial situation. Maybe talk with an advisor to determine how much money you have available to spend on your renovation. If for whatever reason you don't have enough cash on hand, consider financing options such as a home equity loan or line of credit. We actually offer a Get It Done, Pay Later option for projects under $30,000. This allows you to pay for your renovation in instalments as opposed to all at once. The best part is that your payments are still protected, and the homeowner still gets paid as they normally would. If you're contemplating a larger renovation, be sure to include something in your budget for temporary accommodations.

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Budget breakdown: A look at the different factors that will affect your renovation costs

Okay so now that you’ve got a number, let’s break the budget down. Some factors that will affect your renovation costs include:

Materials: The amount of money that will go towards materials will depend on a few things, including the scope of your project, the quality of materials you choose, and where you purchase them. Keep in mind that some distributors seriously mark up the price of their materials for same-quality items as other distributors, so shop around.

Labour: Labour costs depend on the type of work that needs to be done and the contractor you hire. Posting your project on Bidmii can help you get multiple quotes from multiple contractors, making it easier to compare prices and find the best deal.

Permits: Depending on the type of renovation you’re doing, you may need permits. Be sure to factor in the cost of permits when establishing your budget. A quick google search or reaching out to people in your network can help give you an idea of how much to set aside.

Contingency: Set aside a 10% of your overall budget for contingencies. It’s one of those “better to have it and not need it” type of things.

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Find The Right Renovation Contractor

Eek. This might be everyone’s least favourite part about renovating. BUT we recently did an entire post about how to find the right contractor for your job and we recommend reading it for an in-depth guide about how to find a contractor that’s not only right for the project, but also just right for you.  

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Create A Home Renovation Plan

If we’re talking about planning, we need you to seriously consider the most cliche, age-old adage “measure twice, cut once.” Taking the time to create a detailed plan for your renovation can save you time and money in the long run. 

Set your priorities: This should have already been completed early on in the project, but if it hasn’t yet, get to making those lists!

Choose a design: This is the fun part! Whip out those pinterest boards, sift through the latest in design magazines, and start to build a picture of how you want the space to look. If you’re at a loss, or juggling between different styles that you like, maybe sit down with an interior designer. They’ll listen to what you’re thinking and create a custom design plan for you. Of course, templated designs exist as well, and are often a more cost-effective approach. So, whatever option you choose, keep that budget it mind. Designs are labour costs.

Consider your materials: Material considerations ALWAYS come after designs. Having a design and a plan for the space will give you measurements, and once you have measurements, you’ll be able to better plan how much of the materials you need to order. It may make you rethink certain material choices. While high-end materials may look great, they add a significant cost to your project. So just keep this in mind! 

‍Create a timeline: When you have your contractor, the two of you should sit down an create a timeline. We go over this in detail in a couple other blog posts we’ve created, so if you still have any questions, take a look at our blog. You really just want to have a timeline that makes sense and stays on track. Don’t lose site of time devoted to permits, inspections, and any unexpected delays.

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Sticking To Your Renovation Budget

Now that you’re organised, how can you stay on budget?

Prioritise your "must-have" list. Make sure you have the necessary items on your list covered before considering any additional upgrades.

Keep an eye on the budget the whole time. Keep track of all your spending and how it tracks out with regard to the budget. Sometimes homeowners get carried away within the first few weeks, and end up, for lack of a better word, screwed, in the end. OH, and always ask for estimates before committing.

Contingency plans. Set aside some extra money in your budget for unforeseen expenses or emergencies.

For the small stuff, try DIY. Consider taking on smaller decorative tasks to save money. You could try painting old furniture from a second-hand store, or creating a macrame wall-hanging. But, don’t tackle anything However, be honest with yourself about your abilities and only take on tasks that you feel confident in completing.

If we water this down and give you three pieces of advice to stick to your budget it would be to plan ahead, stay disciplines, and be realistic. 

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Factor in Contingency Planning

Typically, a good rule of thumb is to set aside 10-20% of your budget for unexpected expenses. This way, you’ve got a rainy day fund for any unpleasant surprises which will help to keep your project on track. 

Now, remember earlier when we made you prioritize? Well, sometimes you need to prioritize contingency funds for critical issues. If you’re doing a kitchen reno and your GC discovers the plumbing needs to be fixed, this should take precedence over a fancy beveled subway tile, you know what I mean? 

Also, when planning contingencies, have a thorough conversation with your contractor about this. Explain what the process should be in terms of communication when the contractor discovers issues. What happens next? How are additional expenses handled? 

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Okay so, to recap:

Let’s quickly go over what we discussed… just as a refresher:

1. Start off by assessing your needs and setting priorities
2. Then, establish a realistic budget by understanding the factors that affect renovation costs
3. One of the most important things is to find the right contractor for your project (see blog post about this here)
4. After that, you should create a detailed plan for your renovation and strategize ways that you can maximize your budget with smart design choices
5. If you can, consider DIY options for decor to save money
6. And last but not least… work in contingencies!!

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