With 2015 upon us, there’s no doubt the majority of Americans have already formulated a list of well-intentioned resolutions – and may have even included some type of home improvement project in the mix. Financial experts say that Americans took more control of their finances and made money-related resolutions more of a priority in 2014 than they have in the last five years. According to the Fidelity Investments®: Fidelity 2014 New Year Financial Study, short-term savings goals are becoming more prevalent, making it easier to stay focused on turning smaller resolutions into reality. Long-term savings goals, however, still prevail over short-term ones (but the gap between the two shrank considerably in 2014).
As with any goal, commitment is key. Although home remodeling projects require a financial commitment, the benefit to your family’s enjoyment, improved functionality and possible heightened resale value down the road could serve as great motivation to keep on saving.
So…how do you save money for your dream kitchen or bath? First and foremost, closely examine your family’s financial resources, bills and existing commitments to determine how much you can afford to set aside per month in order to meet your savings goal by the targeted date. You will need to formulate the best strategy to budget for this without strapping yourself. Here are some money-saving tips and budget planning strategies that will help turn your home improvement resolutions into a reality:
- Determine Needs Over Wants – Home improvement projects can be divided into needs and wants. Determine the reasons behind your renovation. Is it because your cabinets aren’t functional? Your appliances aren’t working? You don’t have enough space to store all of your stuff? Reasons like these could prove that your renovation is a need. If your kitchen is still functioning properly, it could be a want that can wait.
- Hire a Professional for an Estimate – Unless you are a professional contractor, most homeowners who have undergone a renovation will say they went over budget. Having a realistic estimate upfront on the cost of materials, labor and timing will help you to set a solid budget for your home remodeling project, and enable you to determine how much you need to save each month (and for how long) in order to reach your budgeted amount.
- Budget a ‘Cushion’ – The reality of a home remodeling project is that unforeseen circumstances will almost always arise that you didn’t plan on or budget for. It is therefore always wise to save more than your estimate, so that you have a cushion. It can be a life saver and help reduce the stress of being faced with higher costs that you didn’t expect.
- Take On Smaller Projects First – If you’re planning your first home renovation project, budget for a small one first (like a porch addition or a front door replacement). This will get your feet wet, and help you understand how the construction process works and how much labor and materials typically cost. Once completed, you will be armed with the experience to effectively negotiate with contractors on larger projects in the future.
- Streamline Personal and Lifestyle Spending – While saving for your remodel, limit your spending on needless items – ask yourself if you really need what you are buying. Expenses such as dining out on a regular basis can be real budget-busters. If you typically have Friday date night with your spouse, rent a movie or make a special dinner at home instead of going out. It can save you a lot of money over time. Even bringing your lunch to work as opposed to buying it every day can help you save more money for the “renovation fund” more quickly. The same goes for entertainment costs and also adopting the “do I really need this?” theory. Again, determining needs over wants will help keep your goals in check. You’ll be watching your money add up in no time!
- Set Up Automatic Deposit into Your Savings Account – You won’t miss what you don’t see! Having a specified amount of your earnings automatically deposited into your savings account is a great way to save for your renovation project without feeling the pinch. Learning to budget on your new specified earnings is a rewarding way to budget and save for any financial goal.
- Avoid Personal Loans and Credit Cards with High Interest – Rolling the cost of your renovation into a long-term loan or putting it on a credit card will end up costing you more in the long run. Depending on the scope of the renovation, you may have to take out a home equity loan or line of credit, but saving along the way and paying cash whenever possible (to avoid tax costs) is always the most cost-effective option.
Now that you have determined how you will budget and save for your home improvement project, here are a few suggested saving techniques on the actual renovation:
- Refurbish Structural Elements – If your project involves replacing ceiling beams or wood floors, for example, consider refurbishing these surfaces instead of replacing them. Consider recycling materials and using them in a new, creative way. A great way to save money on a kitchen remodel is to ‘reface’ the cabinets (i.e., install new doors and hardware) if the boxes are still in good shape, as opposed to ripping them out completely and installing new ones. Granite Transformations offers cabinet refacing and an extensive array of door styles, colors and hardware to suit any design need.
- Build Up Instead of Out – If you’re considering an addition, experts say it’s always more expensive to build outward instead of upward. Foundation costs can be considerable. Also, consider repurposing a spare room for other uses – like turning an attic into another bedroom or bathroom, as shown in the photo below.
- Keep the Plumbing and Electrical Where It Is – Moving plumbing and electrical wiring can almost double the cost of your project. Planning and designing your project around existing plumbing can save you a considerable amount of money and free up additional funds to use somewhere else. The installation professionals from Granite Transformations will work with your plumbers and electricians on your remodel (or call on their repertoire of reliable plumbers and electricians to work on your job), based on your preference and need.
Granite Transformation wishes you a happy, healthy and prosperous new year. We invite you to visit us at www.granitetransformations.com to explore our beautiful granite, quartz, recycled glass, mosaic tile and cabinet refacing products. If a kitchen or bath renovation project is in your home improvement plans for 2015, we invite you to sign up for a free in-home design consultation and receive our complimentary home remodeling Starter Guide which maps out the entire remodeling process, so you know what to expect every step of the way. Our goal is to make the process fast, easy and stress-free!
From our family to yours…Happy New Year!