Taking on home improvement tasks can make your house feel fresh, raise its value, and bring more pleasure to living there. However, if you don’t handle your finances properly, they can negatively affect your savings and make your debt grow.
Whether you’re undertaking a significant home improvement or just some minor upgrades, these five financial tips will help you avoid any unexpected expenses.
Draft a Budget That You Can Stick to
The first step is to understand your current financial situation and determine your spending capabilities. Recognize the distinction between what you need and what you want, and account for all potential expenses, including materials, staff, permits, and any unforeseen costs.
Adding 10-15% more money to your budget is recommended, as unexpected expenses often arise during renovation projects. When you have set a budget, try your best to remain within those limits throughout the entire project.
Get to Know Various Financing Solutions
If you don’t have enough money saved for your renovation, you can consider financing options. Consider getting a home equity loan, since it matches your home’s value.
Also, by securing this loan from a trusted lender like AmeriSave, you might save on the interest you pay compared to personal loans or credit cards.
It works exceptionally well for major projects, such as remodeling a kitchen or creating a new room. Depending on the home improvements you intend to make, you may be eligible to apply for a home equity line of credit (HELOC), a renovation loan, or rebates for energy-saving measures.
Focus on Projects that Deliver the Most Value
Different renovations can have varying impacts on a property’s resale value. If you plan to put your house on the market soon, focus on valuable improvements.
Most real estate agents believe that upgrading the kitchen, bathroom, windows, and external appearance brings the most return. Talk to a real estate professional or check online for advice on which improvements will significantly increase your home’s value.
Do It Yourself to Save Funds (When It’s Possible)
Being hands-on with certain tasks can save labor costs, which often account for a significant portion of your renovation budget. If you are capable and confident in your skills, consider taking on projects such as painting, landscaping work, or installing new home fixtures on your own.
It’s important to remember that doing things you don’t know well may end up costing you more money than you expected. Licensed experts should always do electrical, plumbing, and structural repairs.
Save for Your Future
Don’t just focus on the cost of the renovations; also consider how they will reduce your expenses in the long run. Having energy-efficient appliances, insulation in your home, LED lights, and smart thermostats can help you use less energy and be more eco-friendly.
Moreover, choosing quality materials that last longer may be more expensive to purchase initially. But in the long run, they can save you from making expensive repairs.
In a Nutshell
With the right plans, money management, and goals, you can make your home upgrades look nice and cost less. Explore all the available options, know what is best for you, and strive to ensure each investment retains its value over time.
