Keep Your Finances In Check When Remodeling
Many customers know that they want to remodel, but are unrealistic about a project’s costs. Or, they are worried about the cost, and never undergo the project. It is entirely possible to remodel without destroying your finances, but it requires planning and awareness.
Make Sure You Have Adequate Funds
It is smart to wait on a renovation until you have saved up the necessary funds. Unless the renovation is an emergency, it makes more financial sense to save money for your dream remodel. At least part of your project should be paid in cash, as opposed to on credit (but keep a paper trail when doing so). Saving for your remodel can also ensure that you get the remodel you are hoping for, and do not have to compromise in other areas.
If you do have to borrow to complete your remodel, you should sit down and thoroughly compare your financing options. Tapping your home equity, via a loan or a line of credit, is an attractive option to many remodelers. This is because the interest paid can be tax deductible. You should not borrow from your 401(k) to complete a remodel unless it is absolutely necessary. Although a remodel will yield happiness now, completing a remodel by tapping into your 401(k) will simply derail your retirement plans.
Pay Over Time
You and your contractor should negotiate a contractor that allows you to pay in installments. It is not advisable to pay for your entire project upfront. This leaves you no wiggle room – if you are unhappy with your project or the process in which its being completed, there is not much you will be able to do. Payment installments can be linked to project stages or tasks, which builds in a buffer for delays that are bound to occur. For example, if you pay installments by date, you could pay 75% of the project, even though the wrong countertop was delivered, setting the project back. Your installments should be linked to various completion points within the project.
Need Help Creating A Project Budget?
If you know you would like to undergo a remodel but are unsure about how much your dream remodel will cost, contact us today. A family owned business, we are here for you. We understand how daunting a remodel can be, and look forward to helping you through every step of the process. Working together, we can achieve your dream remodel on your budget.