Renovating or revamping your space is an exciting step in home ownership, transforming rooms into true havens that support your happiness and well-being.
Pre-planning is an absolute must for achieving your goals, and this should include a comprehensive budget to ensure you’re spending within your means and are protected in the event of unexpected costs.
Discover the four key steps in successfully budgeting for a home transformation project.
Defining Your Project
Begin by taking time to define your project, determining the extent of the work expected in each room. Are you updating paint and furnishings, or conducting a major overhaul with new fixtures and flooring? The depth of renovation will vastly impact the cost, so it’s essential to clarify this before beginning to ensure you have sufficient savings.
Estimating Costs
Once you’ve outlined your plans, research to get an idea of how much your project will cost. For small updates you’re handling yourself, look online and in stores for the materials, equipment and pieces you’ll need and add up the prices to get your total amount. Remember to account for any significant additional costs like VAT and delivery.
Larger projects requiring professional help are harder to estimate. Get quotes from recommended local companies and do a comparison to find the contractors that balance great reviews with good value.
Factor in the cost of potential unpredictable events such as a prolonged timeline or additional requirements uncovered as the renovation is carried out.
Remember to consider any permits you might need for these projects too: you usually need to request building regulations approval for significant structural changes.
Allocating Funds
When you know roughly how much you’re spending and on what – bearing in mind that costs can change due to inflation or shifting exchange rates – you need to allocate sufficient funds to each area of the project.
Leave more of a buffer for contractor work that’s out of your control. You should set aside a contingency fund of at least 10% of your total budget to ensure you’re not caught out by unexpected charges.
Acquiring funds can be a task in itself. In the months leading up to the project, consider storing your savings in a fixed-term account with higher interest or in low-risk investment opportunities such as index trading that could beat inflation.
Following something as simple as the 50/30/20 rule could help you grow your savings more quickly without impacting your essential and leisure spending.
Tracking Spending
With the distraction of carrying out the work, it’s easy to lose track of your project costs. This can leave you feeling overwhelmed by mounting bills, or with a final invoice you cannot afford. Ensure you stay comfortably in the black by monitoring your spending throughout.
Save all receipts and invoices, storing them together for quick and easy reference.
A spreadsheet or budgeting app is a simple way to maintain an overview of the entire project, giving you reassuring perspective and alerting you when costs are starting to spiral. Don’t be afraid of adjusting your initial budget, as long as you have sufficient funds.
