Is your home becoming old and outdated? And are you planning to renovate your home? Renovating your home does not always mean fixing a plumbing or electrical issue or changing the floor carpets or rugs, while renovation makes your place more comfortable to live in and beautiful. Whether your remodeling activity is small or big, financial planning and forecasts for renovations can get out of your control at any point of the project and you may end up paying a lot more money than you had previously forecasted. Even the addition of a minor cost that you skipped to enter your remodeling budget can disturb your overall financial planning. To keep financial expenses under your control, you need a proper and complete financial plan which includes every aspect of your renovation project.
If you are planning to complete your renovation project without getting into any trouble, we are here to show you multiple ways to avoid a shortage of funds and how you can create a smart plan with smart options and choices for your project.
1. Create a Budget
Before jumping into the process of making a budget, we would like to clarify what “Budget Creation” actually means. Whenever you are planning to spend money on anything i.e., whether it’s a dining out, shopping, or renovating your place, you must get an idea of your total income and savings and how much from those savings you can afford to spend on your planned activity. This whole activity of planning is basically known as budget creation.
Now specifically talking about the creation of a “Renovation Budget”. The best way is to first list down everything which you are planning to renovate in your space. Whether it’s a kitchen area, bathroom space, or lawn renovation. Take your time and list down whatever you are planning to change or add to i.e. All the flooring changes, lighting, wall paint, electric sockets, cabinets, tiles, appliances, and much more. After listing down all the changes you wanted, now the next step is to get in touch with the necessary vendors and get necessary quotes to get an idea how much it will actually cost to purchase your required materials. Also, talk to the labor team to get to know how many days will be required to complete the necessary changes so that you can add in per day labor cost in your budget creation accordingly. After adding the material and labor costs, now look at the total budget and make adjustments if the total cost is on the higher side by choosing less expensive materials and labor options. It is always the best approach to allocate some margins in your budget for unexpected expenses e.g., margins for unexpected tax charges or for any unknown documentary work expense etc. To do so, you can simply add 15% or any percentage of your choice at the end of your budget working to avoid any unexpected surprises at the time of actual execution.
2. Cash Payments
It might sound like an old theory but spending money from your already available savings and funds will help you to save a lot of money which otherwise you will pay in the form of interest if you go for a loan or purchase material on credit from vendors. If you are remodeling your space for re-sale purposes, then it is a wise decision to take a loan as ultimately you will get a return from your investment to pay off your loan or credit. But if resale is not the purpose and you are renovating your space to make it more useful and beautiful then payments in cash are the best option to go with. If you have a shortage of cash now, then look out for some additional ways to save more from your monthly income instead of taking a loan or credit.
3. Other Financing Options
If you have a shortage of cash and you want to finance your home renovations through a loan or credit, then there are a few options to consider. We strongly recommend you go for the Home Equity Line of Credit (HELOC). In HELOC, homeowners can borrow money against their homes. But HELOC is usually recommendable for projects of bigger scale such as complete home renovations and not for small or simple projects. Also, many homeowners prefer to renovate their space by using their credit cards. This is a good idea until and unless you have plans to pay off your credit balances on time. If you have a strong credit history, then you can also apply for a loan through SOFI which is an online financing company that provides personal loans to high-income individuals.
4. Selling Old Fixtures
If you are planning to renovate your space by replacing your old fixtures and furniture, then it is a better idea to not throw away old fixtures. It is obvious that you will need funds for the purchase of new items, therefore, consider selling the old items. By doing so you are making it easy on your pocket to manage the new purchases. As old items will give you some funds that can be added up with some more money to purchase new fixtures. In current times, it has become very easy to sell your old stuff as you just have to post the description and pictures of your old item to the different buy/sell sites and buyers will contact you and will pick the item from your place by themselves. In case no one wants to buy your old stuff then you still have the option to sell your metal items in the scrapyard and get cash in exchange for it. And, if home remodeling is comfortable in your pocket, then throwing away your old stuff and items is still not a wise option. You can simply donate it to any NGO or Charity organization.
5. Get in Touch with an Architect or Designer
If you are considering going with a whole house renovation, then hiring a professional for this purpose is a good option to go with. But the biggest challenge in Los Angeles for homeowners is to find the best Architect or designer who can understand their design as well as budget requirements. It is better to hire a professional at the very early stage of your project i.e., at the time of budget setting because such professionals are doing projects like this on daily basis and they have a piece of very good knowledge of current material and labor rates and they can give you a rough idea about the total cost by just looking at your renovation space. This can ultimately help you to decide what you can actually afford as per your available funds.
6. Look out for purchases in Sale Times
There are multiple times in the year when outlets offer multiple discounts or sale offers on the purchase of appliances or other materials. It is a wise decision to plan your purchases for remodeling at that time of the year with which you can take a maximum discount benefit. For example, the black Friday sale on appliances, the Christmas sale for furniture & other lawn items, and much more. Never let your impatience keep you away from getting a big discount or a big deal.
7. Ask for Help
If your pocket is tight and you have forecasted your home renovation by doing it all yourself then there are more chances that you may end up messing a few things up for which you will have to hire someone to fix it. This hiring can add up the extra expense to your project instead of saving money. But if you have some friends who can help you to do some of the electrical, plumbing, or flooring work and if they have the necessary tools and experience then you should definitely ask for their help. Always make sure that you communicate properly whether any financial compensation is required in exchange for services or not to keep things clear between you and your relatives/friends.
8. Earn Rewards against money Spent
As we all that in today’s fast-moving online world, almost every bank offers rewards against the use of your credit cards. This is one of the options to go with while the purchase of your budgeted materials. You can simply make purchases through your credit cards which you can pay off with your available cash or other savings in your approved credit time period. Such purchases may not help you at the time of renovation, but why waste the opportunity to make free purchases through your earned reward points in the future?
So, here you go. We have highlighted a few financial and fund management options to consider while remodeling your home. There are many more ways to make it easier on your pocket and IND Construction is available to guide you through your financial planning for your renovation journey. Our team has experience in multiple home remodeling projects with a different budget, creative and size requirements. We will definitely help you to make your imagination come true. IND Construction has a number of screened contractors who can provide you with all support from start to finish.