The pandemic has all of us spending more time at home — and more time thinking about how to improve our living space. Repairs and remodels are not only an understandable inclination right now, but an exciting one. With our offices and favorite places off-limits during the pandemic, we can imagine endless ways to improve our homes, from new kitchen cabinets to improved home offices to garage-turned-home gyms.
However, the cost of these projects often adds a sobering dose of reality. For homeowners, the sticker shock of paying for home improvement projects can stall the effort altogether. How can you maintain the momentum for some much-needed (or desired) home improvement, while staying within your means? The key is to devote as much time planning for the financial aspects of your project as you do for the aesthetics.
Understanding what a project costs and how you’ll fund it early in the process allows you to proceed with less stress. You’ll also be able to make smarter decisions about everything from DIY aspects to finishing touches. The end result: home improvements that fit your budget and enhance your space. Here’s a handy checklist for ensuring you’re financially ready for your next remodel.
1. Understand what you want from your home remodel.
This tip may seem simple, but remodel projects rarely are. For instance, replacing countertops in a bathroom can lead to replacing tile, repainting walls or wanting new cabinets. Begin by asking yourself: what is the goal of this improvement? For instance, do you just want your space to look nicer? Or do you need improved functionality or even a whole new space?
In addition, if you plan to move relatively soon, consider if recouping the cost of an improvement is important. Remember: remodel projects can help homes sell faster, but they rarely lead to higher sale prices. Once you’re clear on your vision, fine-tune it through the lens of either must-haves or nice-to-haves. Replacing outdated carpet may be a must-have for a living room update, but all new furniture can fall into the latter category.
2. Create an initial estimate for the project.
With your end goal in mind, you can begin pricing out how much the materials and work will cost. Take advantage of the Discover Personal Loans home remodeling calculator to ballpark kitchen and bathroom projects. Another factor to keep in mind: if you’re not going to DIY the project, then you’ll want to call contractors for estimates as well. Getting estimates from two or three different vendors will give you an idea of prices in your region, and talking with several contractors can help you refine your estimates even further. Also, be sure you understand how the contractors are pricing your project — is it a fixed cost or cost plus (the cost of labor plus materials)? Each approach can make a big difference in the final cost.
3. Be sure to account for extra costs.
Home improvement projects often exceed what homeowners initially anticipated. Part of the reason for cost overruns is that projects typically entail ancillary costs beyond the materials and labor. For example, consider whether you need to pay for any city or county permits to complete your work. Also, think about how the project work will impact your life. If a bathroom project means you don’t have a shower or toilet for a few weeks, will you need to stay in a hotel? Those are costs you should figure into the project total. Lastly, it’s worth determining whether the project might uncover other repairs that need to happen at the same time. For example, remodeling your deck may mean that you need to landscape an area that was previously covered or repaint a portion of your siding.
4. Evaluate where to splurge and where to save.
Fortunately, remodeling project costs are rarely set in stone. You can reduce the cost of a project dramatically by making smart choices about what you buy and putting in a little sweat equity. Consider parts of the project that you want to DIY. For instance, if you’re updating a bathroom, you may be able to do the painting and demo yourself. You’ll save on contractor costs there but may need to hire a plumber or someone specializing in tile. The same mentality works for materials. Consider mid-range products, make use of remnants, which are often sold at a discount, and explore creative uses of budget fixtures and finishes. Plan for these savings and swaps early, so when unexpected costs come up, you can find other places to save and not dramatically alter the final project price tag.
5. Explore home improvement loans.
Depending on the size of your project, paying in cash may not be possible. This is where smart financing can keep your plans on track. For projects that total less than $35,000, a personal loan for home improvements might make sense. With a personal loan, you don’t have to borrow against the value of your home. That’s appealing for many reasons, including the fact that you don’t need to go through a longer refinancing process. You can customize your loan amount and length to work with your project or budget. Plus, your money can be sent as soon as the next business day after acceptance.
6. Prepare to monitor spending along the way.
Once the project is financed and in progress, congratulations! However, there’s still some financial follow-up you should do. Be sure to monitor bills from contractors, as well as the actual cost of materials as you begin purchasing them. Then investigate any discrepancies so you can pause any unexpected spending before it gets out of control.
Refreshing your space can bring new joy into the place you spend the most time. Follow these steps to ensure you’re financially ready, and then dive into the projects that will transform your home into a haven for rest, work or whatever else you need.
Interested in financing your remodeling project? Learn More about Discover Personal Loans