Chances are you’re not reading this in the grand hall of your Alpine castle with servants shuffling about busily readying the fortress for the upcoming winter. Which means you probably don’t have an original Leonardo sketch you can auction off to raise money for needed renovations. Instead, like the rest of us mere mortals, you’ll need to devise a realistic budget sourced from your hard-earned income to achieve the renovations you have in mind. While that may not seem like a big deal the fact is a good portion of home improvement projects end up home improvement nightmares either because the budget wasn’t realistic or simply wasn’t adhered to.
Ensuring a Happy Ending to your Home Improvement Project
When determining a budget for an upcoming home improvement project there are two important things you’ll need to do: first, take off the rose colored glasses and second, channel your chemistry teacher. You know, the one who never smiled and just stuck to the facts. These two things will be key to your renovation turning out the way you want instead of the way you fear.
Tossing the Rose Colored Glasses
When setting a budget for a home improvement project wishful thinking is the first thing that needs to be abandoned. It simply won’t get you anywhere you want to be. You need to take off the rose colored glasses and take a cold-light-of-day look at your finances, taking into account all the variables (current expenses, upcoming obligations etc.) to determine if you can afford to do what you want to do. If you’re of a mind to borrow money for the project you’ll need to figure out exactly how much you can afford to borrow without undermining your lifestyle—then, mostly importantly, ensure that you do not needlessly exceed this amount later in the process.
Channeling the Chemistry Teacher
The reason you’ll want to channel your chemistry teacher is because they had something you may not: discipline. By that we don’t mean corporal punishment, we mean an attitude that doesn’t allow details to be ignored or glossed over. There will be pressure on you from day 1 to push the envelope regarding the scope of the project and materials used. Don’t give in. Have the parameters clearly defined before any contracts are signed and don’t waiver.
Arriving at a Number
Now that you have the right outlook and attitude arriving at a budget is a fairly well understood process that entails 4 basic steps.
First, get a ballpark idea of what your costs will be. Spend as much time as you need researching the various components of your project to get an accurate idea of material costs. (A lot of relevant information is available on the web but you may also have to do some legwork and visit suppliers.) Research local labor costs as well and try and find out what others in your area are spending on similar projects.
Second, use your newfound realism and discipline to scale the project to adhere to your budget. If you’ve discovered that what you want will cost $50,000 and you can realistically afford $20,000 the discipline will have to kick in. You’ll need to either dial back the scope of the project, choose another, more affordable project or wait until you’re in a better position to handle the cost. Failing to do so could put you behind the financial 8 ball for years.
Third, ask for quotes. Assuming you are moving forward on a project you can realistically afford the next step it to gather quotes from prospective contractors. Tell each contractor exactly what you want to do right down to the countertop material and number of track lights. Give each contractor the exact same information and ask for itemized bids. Throw out any ridiculously high or low bids and make sure the winning bid allows you to also set aside 10-20% for contingencies.
Lastly, stay disciplined. Throughout the project you’ll be tempted to upgrade the cabinets, upgrade the flooring, upgrade the lighting scheme, upgrade the appliances etc. etc. Don’t do it. Every time you spend more on A you’ll have less to spend on B. Either that or you’ll be tempted to borrow more money or raid the college fund (just this once) to cover the additional costs. This is how the money pit is created and where regret is born. Don’t waiver. Don’t give in to temptation. Stay disciplined. You’ll love yourself for it in the long run.
The secret to successful home improvement projects is not to view them as fantasy fulfillment but as investments. If you can stay grounded in the facts and not give in to the temptation to say “Sure. Why not?” you’ll wind up at the end of the process with the home upgrade you wanted and a future unsullied by financial mismanagement. Who could ask for more?