Simplify budgeting for home improvement projects with these tips on how to create a savings strategy and reduce overall spending to create the home of your dreams.
Are you considering some home improvements or renovation projects in the coming year? Maybe you’re thinking about making some changes that would make your home easier to sell, or perhaps you’re simply ready to take the plunge and turn your current house into your dream home. You may be ready, but is your budget ready? Here are some tips on how to save for home improvements.
- If possible, have a designated savings or checking account set aside for home improvements to keep those funds separate from other home-related expenses. Having a dedicated account can help you keep better track of your savings goals and progress
,and will help eliminate the temptation to dip into your savings for other expenses.
- Get an accurate, realistic estimate of what the total cost for your home improvement project will be. Talk to contractors and price out the materials that you’d like to use. Ask other homeowners in your area about their budgets for similar projects. Once you think you have a good idea about how much you need to save, add in some wiggle room for the inevitable surprises that always seem to occur.
- Formulate a savings strategy. You can go about this in different ways, depending on your income, other expenses, and home improvement goals. First, you can set aside a certain percentage of your home’s value each year toward home improvement projects. For example, you can set aside 2 percent of the assessed value of your home and land each year and divide that into a monthly savings amount. Or you can estimate the total cost of the home improvement project that you wish to pursue. Then divide that total into monthly installments that your budget can handle, stretched out over one year, two years, or multiple years. To help boost your savings, consider committing any financial windfalls, such as tax refunds or monetary gifts, to your home improvement account.
- Look for creative ways to save money that you can earmark for your home improvement savings plan. Cut back on your home’s energy usage and save money on utility bills that can go toward home improvement projects. Check with your cable television, telephone, and internet service providers to see if there are lower-cost plans you can switch to and deposit the difference in your home improvement account. Clean out your attic, basement, garage, and closets and hold a garage sale with the proceeds going into your home improvement savings account.
- While you’re saving for your home improvement project, take time to learn some DIY skills that you can develop to help save money on contractors. For example, you could do the painting instead of hiring a professional painter for your project, or perhaps you could learn to install tile. Choose something that interests you, and you might just get a new hobby that you enjoy in addition to savings.
- Consider adding a home warranty to help protect your budget from unexpected home breakdowns while you’re trying to save money for home improvements. Home system and appliance malfunctions can be real budget busters, and they always seem to happen at the worst possible times. Instead of dipping into your home improvement fund for unplanned breakdowns, a home warranty can offer protection for the repair or replacement of covered items.
If your savings plan doesn’t go as well as you had hoped in spite of your best efforts, you can always scale back your home improvement project and still get the benefit of some updates. For example, consider making some cosmetic changes instead of more expensive structural alterations. Refinish outdated kitchen cabinets instead of replacing them, or install new countertops instead of tearing out the entire kitchen and changing the layout. Put in a new bathroom floor and paint the walls instead of installing expensive new fixtures. Or, approach your project in stages and make improvements a little at a time, as your budget allows.