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Couple Discussing Renovation Budget Plans
Planning a home renovation can be exciting—but keeping your spending in check? That’s where things get tricky. If you’ve never managed a large-scale remodeling project before, estimating costs can feel overwhelming. The good news? With the right steps, you can build a renovation budget that’s practical, detailed, and won’t break the bank.
Here’s how to plan your home renovation costs with confidence.
What’s the Average Cost to Remodel a House?
According to HomeAdvisor, the national average for home renovation costs is around $49,979. However, this varies widely based on your home’s age, location, and project scope.
Older homes tend to cost more to renovate—especially if outdated wiring, plumbing, or structural issues need to be addressed. Renovation costs can range anywhere from $10 to $150 per square foot depending on complexity.
One of the easiest ways to manage your renovation budget is by planning project costs room by room:
Room Estimated Cost
Bathroom $3,000 – $25,000
Home Office $5,000+
Living Room $5,000 – $10,000
Kitchen $6,000+
Utility Room $6,000+
Master Bedroom $10,000 – $15,000
How to Estimate Your Renovation Budget
Before crunching the numbers, start by assessing your home’s current market value. A good rule of thumb: don’t spend more than 10–15% of your home’s value on any single room.
For example: If your home is worth $250,000, try to keep kitchen or bathroom upgrades below $37,500. Spending more may not yield a return when it comes time to sell.
Know Your Financing Options
You can’t build a renovation budget without knowing how you’re going to pay for it. Whether it’s cash, a personal loan, or a line of credit, determine your total funds before starting the project.
Also, be sure to set aside 10–20% of your budget for surprise expenses. Renovation projects almost always come with a few unexpected costs.
Popular Financing Options:
• Home Equity Loan or Line of Credit
Borrow up to 85% of your home’s value (minus what you owe). With a line of credit, you borrow as needed and only pay interest on what you use.
• Cash-Out Refinance
Replace your current mortgage with a higher one and use the difference to fund your renovation.
• Personal Loan
These are fast and flexible, but often come with higher interest rates.
• Cash
The best way to avoid debt—if you can afford to pay outright, you’ll avoid interest altogether.
Smart Ways to Cut Renovation Costs
Want to stretch your dollars further? Try these budget-saving strategies:
• DIY Demo: Tear out old cabinets or flooring yourself if it’s safe and simple.
• Buy Fixtures Directly: Shop for sinks, tile, and hardware on your own to avoid contractor markups.
• Act as Project Manager: If you're confident, hire subcontractors yourself instead of going through a general contractor.
• Paint It Yourself: Save $300+ per room by handling the painting solo.
• Shop Secondhand: Look for reclaimed materials, lightly used appliances, and refurbished finishes.
Step-by-Step: Creating Your Renovation Budget
1. Define Your Goals
Make a list of everything you want from the renovation. Then split your list into “must-haves” and “nice-to-haves.”
Ask yourself:
• What’s the purpose of this renovation?
• What features are essential?
• Where are you willing to compromise?
• What are you willing to splurge on?
2. Build a Detailed Budget Plan
Create a spreadsheet to track estimated costs for each part of the project. Be thorough!
Include:
• Labor: Use platforms like HomeAdvisor to get cost ranges for trades like plumbing, electrical, and general contracting.
• Materials: Include paint, fixtures, tiles, hardware, finishes, and even shipping and taxes.
• Appliances: Include purchase, delivery, installation, and disposal.
• Living Expenses: Account for temporary housing, pet boarding, or takeout if your kitchen’s under construction.
3. Get Multiple Contractor Bids
Once you know what you need and what you can afford, reach out to local contractors for bids. Get at least three estimates for comparison.
When evaluating contractors:
• Check reviews and references.
• Be upfront about your budget and priorities.
• Ask how they handle unexpected costs.
• Clarify timelines and work processes.
Pro Tip:
Avoid extremely low bids—they often signal inexperience or cut corners. Use competing offers as leverage to negotiate with your top-choice contractor.
4. Pick the Right Time for Your Project
The season you choose can affect the price.
• Summer: Peak renovation season—expect higher prices and limited contractor availability.
• Spring: A busy season, though slightly less expensive than summer.
• Fall: A shoulder season with fewer delays but variable weather.
• Winter: Best for interior updates. Fewer contractor bookings may lead to discounts.
Final Thoughts
Budgeting for a home renovation doesn’t have to be overwhelming. With proper planning, smart financing, and a few cost-cutting strategies, you can transform your space without financial regret.
Start with a solid plan, keep track of expenses, and work with trusted professionals—and you’ll be well on your way to your dream remodel.