Planning Guide > Getting Started

Know Your Limits
The Remodeling Budget

Remodeling projects can quickly get out of hand if you are not careful. Avoid the pitfalls with a few simple steps.

• Determine how much you can afford to spend:
  The easiest way to determine the actual cost of the project, is to get several bids for the job you want done. Once you know the cost, you can either scale down your original plans if they prove too expensive, or secure funding for the project.
  
  
• Be Realistic When Setting the Budget Amount.
  If your budget is too low, you won't be able to complete the work you want done. Too high, and you'll end up spending more money than you should.
  
  
• The 80/20 Rule: Plan on spending only 80 percent of what you can afford. Put the additional 20 percent in reserve to cover changes, unforeseen problems, and miscellaneous charges.
  
  
• Funding:
  Few of us have enough cash or credit card limits to pay for a major renovation. But there are other sources available to you such as a Home Improvement Loan, Home Equity Line of Credit, Home Equity Loan (second mortgage), or a cash-out refinancing of your current mortgage.
  
  
• Avoid Making Changes:
  Avoid making changes after the plans and specifications are completed. A seemingly minor modification can cost a significant amount of money and time.
  
  Remember that anything not included in the original contract will cost extra. It's very easy to start tacking on hundreds and even thousands of dollars in change orders that will break both your budget and your timeline.
  
  
• One Thing at a Time
  Resist the temptation to begin more than one remodeling project at a time. Finish the project you have planned before deciding now is the time to overhaul the rest of the house.
  
  

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