Setting a budget for your kitchen remodel can be tricky and staying within it sounds so obvious and simple, but it’s harder than you think.
There are several factors in determining a budget for your home; you should consider the following,
How much can you afford to spend? Determining how much money you can spend on your renovation will help you figure out the project scope.
If you’re on a tight budget, skip the nonessentials and focus on convenience. Work-savers include a lazy Susan, a pull-down soap and sponge holder, and deep drawers for pots. Glazing, while nice, typically adds 10 to 20 percent to the cost. Remember to check if installation is included in your prices.
If you feel like getting dirty and saving some money, do some of the easy work yourself like removing out the old cabinets, appliances and flooring.
What is the scope of the project? Will you be tearing out the entire main floor, removing walls, re-framing, electrical and plumbing, or will you keep the same floor plan and install new cabinetry.
How long you plan on staying in your home? If you are planning on selling the home within the next few years, then your kitchen renovation should be viewed as an improvement on a real estate investment. Only spend what you think you will get back. If you plan on staying then spending the extra money could pay off, do a remodel that will make you and your family most comfortable.
Where do you live? Is your neighborhood modest or upscale? Are you able to sell your house for more then what you purchased it for.
Know how the costs will break down.
Labor will consume anywhere from 20 to 35 percent of your project costs. Cabinets can also devour a big chunk of your kitchen remodel budget.
Here’s How it Breaks Down, on Average:
Set aside 15-20 percent of your budget to handle the unexpected.
To make your overall kitchen renovation experience less stressful on your piggy bank, putting some money on the side for the unexpected is recommended.
Almost every kitchen remodel will have a surprise, especially in an older residence. For instance you rip out your drywall and out of date wiring and needs to be updated to meet electrical codes or a leaky water hose behind your dishwasher that has caused floor damage.
Renovation Priority List
What things must you have?
My Renovation Must Have’s:
- Stainless Steel Appliances
- Granite Countertops
- Tile Back Splash
- Hardwood Floors
What’s most important to you? Writing a list of your priorities will help you check of what you wanted to include and what you can exclude if you start exceeding your budget and you’ll still get the top things on your list done. Remember little things add up like custom wood, finishes and accessories.
How will you pay for this project?
There are many ways to pay for a kitchen remodel, home equity loans, refinancing, and personal loan or cash in hand, however borrowing money at a low interest rate may be smarter than pulling your money from an investment account getting a higher return.
If you’re getting a loan, factor in costs like interest and loan origination fees. Also, find out when you’ll get the funding from your loan. You’ll need to make deposits with your contractors, and you’ll need to pay for materials up front.
Where will you stay while the renovation takes place?
If you are doing a large project you may want to move out while the work is being done. This allows trades to come and go without disturbing you and you will not be living with drywall dust and tools. However if living with a family member is not an option and renting a short-term condo is not in the budget, then setting up a temporary kitchen in an adjacent room will help with your sanity and help to feed you and your family during the renovation. You will most likely be picking up or eating out during your kitchen renovation, which will also need to be including in your budget..
Make a Budget Spreadsheet
If you write it down, check it and update it, your spreadsheet will help you ensure you stay on budget. It will allow you to compare your budget to your spending. If you see a cost overrun starting to happen, you can stop it.