How to Budget for a Home Renovation

Creating a budget for a large project you've never done before is a huge challenge. When it comes to home renovation costs, building a feasible budget requires a detailed plan and lots of research. When you're deciding on your home renovation budget, it tends to be easier and more affordable to prioritize projects by room.

Typically, you can expect to spend at least $100-$200 per square foot on any renovation. Renovations made to an older home tend to cost more than a newer one, especially if the wiring, plumbing and other features aren’t up to code.

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Average Cost to Renovate:

• Kitchen: $25,000 - $50,0000

• Bathroom: $8,000 - $15,000

• Basement: $10,000 - $27,000

Source: HomeAdvisor

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How Much Should I Spend on a Home Renovation?

If you consider the value of your home as a whole, you can get an approximate idea of what your home renovation budget should be. You don't want to spend more than 10-15 percent of your home's value on a single room. If you spend more, then the value of the renovation won't proportionally add to the value of your home.

Steps for Creating a Detailed Home Renovation Budget:

Step 1: Prioritize Remodeling Needs

Create a detailed list of everything you'd like the project to include. Then, prioritize that list from most to least needed. The easiest way to stay on budget during a renovation is to know exactly what you want down to every detail.

Step 2: Create a Detailed Remodeling Plan With Cost Estimates

Build a spreadsheet that includes each portion of the project and the estimated cost for things such as labor and materials. It's important to include every expected cost such as; paint, knobs, faucets, tile, and anything else you'll need. You also want to include costs for appliance installation/delivery, and how you plan to dispose of old appliances.

Creating a detailed list that includes expected costs will help you build a more accurate remodeling budget. As well as creating more clarity on what exactly you expect from your contractors. This also allows your contractor to focus purely on labor costs and time estimates.

Tips for Saving on Home Renovation Costs:

When creating you remodeling budget, these tips are helpful to further reduce your costs.

• Complete demolition yourself: As long as there is no expertise required, consider removing cabinets or pulling up old tile on your own. This is a good way to reduce labor costs.

• Order fixtures and finishes yourself: Ordering your own fixtures/finishes allows you to find the most cost efficient products. You could even come across some deals or buy used items to help you save a few dollars.

• Do your own painting: Painting a room on your own can save you $300 or more in labor costs.

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By taking these careful steps to plan for and reduce the cost of each part of your project, you should be able to complete your renovation within your remodeling budget!