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So you’re about to do some renovations to your home. You’re excited about all of the different possibilities that are floating around in your head. While renovating can be a very exciting time in a homeowner’s journey, it can also be stressful and put you into debt if you’re not careful how you do it.

You need to be thorough in your planning and prioritize the rooms in your home that need renovations. Setting aside a budget is crucial because most professionals agree that this is the biggest problem that they encounter.

Renovations are going to cost more than you think, and you don’t want to begin a project only to realize that you haven’t put aside enough money. Paying with cash, rather than different loans is the way to go. Make sure it is money that you have and not money that you’re borrowing. Don’t do renovations if it’s going to put you in debt.

HOW DO YOU BUDGET FOR RENOVATIONS?

Firstly, you need to think about what parts of your home need renovations. You also need to factor in what kinds of renovations you’re looking for, and whether or not you can complete any of them yourself.

The cost of labor is often an over-looked expense, but it can be costly if contractors need to do all of the renovations. Some folks are just looking for a small change to improve the room and this can less costly than tearing down half of the home in order to complete the renovations.

Call several different contractors, and meet with some as well to get a ballpark figure of what it will cost to renovate your home.

Calling 5 or 10 contractors isn’t overkill. You should get as many numbers as you can in order to properly budget. Meet with 3 or 4 and get them to look around your home, and see what it will cost for your renovations.

As we mentioned, it will often cost more than you believe, so set aside a higher number than the one given to you by the contractor.

Then prioritize. Which room needs some TLC the most, and if you can’t afford multiple renovations, start with the most important room and then complete it when you allocate the funds. Remember, stay away from loans. Make sure you have the money in hand. It will only make your life easier.

HOW DO YOU LOWER THE BUDGET IF NEEDED?

If you find that the estimates given to you by the contractors are a little steep, there are ways that you can lower the budget.

Find areas where you can DIY. Whether this is demolition or painting, if there are areas that you are comfortable with then you can always consider skipping on hired help for those sections.

Another way to lower the budget can be to shop for your own materials. You can shop for lower-cost materials instead of hiring contractors to do the shopping. You just need to make sure that the materials you are purchasing are still going to work for the renovations. You can talk this over with your contractor.

Keep in mind that you’re likely to spend between 5 to 15 percent of the cost of your home on kitchen renovations. While renovations to your bathroom will cost between 3 to 7 percent of your home value.

Of course, these numbers aren’t set in stone, but they are numbers that you should keep in the back of your head while planning a budget.

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