How to budget for home renovations

Making changes to your home is an exciting time.
But the amount of decisions to be made and the money aspect of it can be overwhelming.

How to budget for home renovations is a question I get a lot because many people don’t know how much things can and will cost.
Just randomly pulling a number out of a hat and saying that’s your budget for your home renovations isn’t a very smart and realistic way to do it.

It might sound boring to deal with the numbers and feel limited by your finances when all you want is to do the fun design part.
But it’s absolutely crucial to set, and maintain, a budget before doing home renovations and I’ll tell you how to do just that in this step-by-step guide.

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How to budget for home renovations

Hi, I’m Nadine

Interior design expert, globetrotter and the creative mind behind this blog and NH.DESIGN.

I’m originally from Germany but have been living abroad for over 10 years, from Canada and the UK to Sweden.

So I ask myself the question what “home” means every day.
I have made it my mission to help as many people as possible to find their own answer to this.

Join my creative world on Instagram @nhdotdesign or find out more about me

Review your finances

Before you can even think about how much to spend on home renovations you need to know your overall financial situation.

What monthly expenses do you have?
How much money do you have in your savings account?
Do you need to take out a loan for bigger, or multiple, renovations?

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Pro Tip

ONLY take out a loan for renovations when the changes will have a direct impact on the value of your home!

If your home renovation budget comes out of your savings it’s good to know how that might impact future spendings. I would never recommend using up all your savings because you never know what might happen. 

But maybe you also have to save up for your home renovations first. In that case it’s good to continue with the next step so you know how much to save up.

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    Do your research before deciding on a budget

    Doing your research is important before you can even start to set a budget for your home renovations.

    I said in the beginning that a lot of people don’t know how much things cost. So it’s good to do your research and get a feel for the cost of different things. Of course costs can vary significantly depending on your location, labor, building standards, shipping etc.

    So comparing costs before making final decisions is a no-brainer.

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    Pro Tip

    Get multiple quotes if carpentry or construction is involved.

    The easiest way to get started on your research is to have a look at inspiration on Pinterest or Instagram. See what pieces of furniture or accessories you like and research different suppliers for those specific pieces. The same goes for carpentry or construction elements. Start by deciding what you like and then get quotes from different companies.

    Prioritise different renovations based on your budget

    If doing it all at once isn’t realistic, prioritise what needs to be done first.

    We often want to do everything at the same time but that’s actually not the best idea, especially if you’re moving to a new home. I always recommend living in a space for a few weeks or months to get a feel for how you use the space. It’ll give you a better idea of what you want to do with it. Of course that isn’t always possible because some renovations may have to be done before a place is even livable. In that case I’d strongly recommend working with a designer because you’ll get their expertise and they’re able to point out things you might not have thought of.

    Depending on the extent of the home renovations you want to, or have to, do, it’s generally a good idea to start with smaller things and go room by room. Especially when you’re already living in the space. Having all spaces under construction isn’t comfortable and often leads to spending more time and money on them than separating each project.

    Generally, I’d recommend starting with spaces that have to be fully functional but aren’t, like kitchens and bathrooms. Having an outdated kitchen with a layout that doesn’t work for your lifestyle takes priority over a bedroom with a not-so-nice paint job.

    Kitchens and bathrooms are also high ticket projects so budgeting for them carefully is key.

    I’d also always recommend starting with areas where you socialise and invite other people into, like the living room.

    Also read my post about what costs to expect per room when renovating.

    Use a budget template to keep an overview

    Once you’ve assessed your financial situation and prioritised the different projects it’s time to budget for your home renovations.

    For that I will always, always, always recommend a budget template!
    Not only does it help you to stay on track it also helps you visualise where the money is going. And if you’re like me, visualisation is key.

    I’ve created a template for myself and my projects that I’ve been using for the past years, ever since we went overboard on our bathroom renovation.
    (yup, it happens to the best of us)

    I start by filling out the overall budget for all my home renovations and then break it down into different smaller projects, like the kitchen, living room and bedroom for example.

    The template has columns and formulas to show me my planned budget AND my actual spendings, which is super helpful. And the best part is that it doesn’t just show numbers, it actually has visual graphs to show how much of my budget I’ve already spent.

    Throughout the projects I update the template with all the things I’ve bought. The budget template then does the math for me and shows if I’m on track, how much money I have left per project or if I’m spending too much.

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    Pro Tip

    Always add 10-20% extra to every cost just to be safe. And don’t forget to add shipping costs where it’s relevant, too!

    Budget template

    Always expect the unexpected and have a Plan B

    This may be my German genes but I always try to prepare for every possible outcome and think of what could go wrong (and I’m going into each project KNOWING something will go wrong, it just happens). And I always have a Plan B!

    Of course this also comes with experience but you can still try to think of things that could go wrong and prepare yourself.

    Need some examples?

    Delivery times could be longer than expected. In that case you could plan to use an alternative product you can get faster. Or think of a temporary solution until it arrives.

    You could run out of materials because you haven’t ordered enough. The rule of thumb is to always order 10-20% more to be safe.

    Measurements are wrong and now things don’t fit. An old handyman saying goes “measure thrice, cut once”. So either measure multiple times to be absolutely sure, or have a Plan B to modify the solution or have a new solution altogether.

    How to save money when budgeting for home renovations

    I’ve touched on it a little before: doing your research and comparing prices is important.
    It could potentially save you quite a bit of money.

    Another way to keep the costs down is doing some of your home renovations yourself.
    Labor is oftentimes quite a substantial chunk of the overall budget so cutting all or parts of it out can make a big difference.

    Choosing less expensive alternatives for designer pieces will stretch your home renovation budget. There are tons of amazing dupes (design lingo for duplicates, in case you were wondering) out there, just check Pinterest.

    And last but not least, one of the most surefire ways to save money when budgeting for your home renovations is working with a designer. 

    I know, it sounds counterproductive to spend money on that but a designer can, and will, save you money overall.
    They know the best places to shop for the best prices, know less expensive alternatives for designer pieces and can potentially get your trade discount, too.

    Plus, the time you’ll save doing all the research and designing yourself is important too.

    Nadine, founder of Malmö-based interior design studio NH.DESIGN.

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