5 tips on making a budget for a remodel

In a home improvement project, knowing what you want is easy, but it is tough to figure out how much you can spend on the project. You need to plan ahead and estimate a budget before you start your project.

Estimate the costs

First, find out how much your remodeling project will cost. Normally, major upgrades like a bathroom remodel, or family room addition will cost you $100 to $200 per square foot. You can go to a remodeling contractor and find out how much your remodeling project might cost.


Find out how much you have to spend

You then need to find out whether you have enough money for the project or not. If you are paying cash, then the job is easy. But if you need to borrow, then you should weight the various financing choices. You must assess how much a bank will lend you and how much monthly expense you will incur because of the loan. Most people take a loan from a home equity line of credit.

Get quotes from a few contractors

You first need to specify the details of your remodeling tasks upfront, so that you can tell the remodeler what you expect of them. You should get recommendations for minimum three contractors from your friends and neighbors. You should ask these contractors to give you an itemized bid. You should look at the recent works of the contractors and check out their references.


Cost overruns

You should add 15% to 20% contingency for the unforeseen changes and problems that occur in the projects. Find out if you can still afford to pay for the project.

Set priorities and try to fit the project within your budget

Scale down your project and you can still be satisfied and solvent. You can ask your contractors for providing suggestions on cutting costs. You can think of low-cost alternatives, keep the old items that are still functional, and make the project smaller.
Lastly, you can buy the necessary items yourself from discount stores, and it will save you 20% of your project costs. But when purchasing materials, you have to coordinate with your contractor.