How to Set a Budget for Home Improvements

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Whether you’re thinking of painting a few rooms or replacing your roof, it’s a good idea to create a budget for your home improvement projects to make sure you don’t overspend. Here are some steps to help you create a budget for any size remodeling job.

Determine Your Goal

First, ask yourself, what do you want to renovate and why. If you are finishing your basement, do you want to make it easier to store materials? Do you want a place to entertain guests? Do you want to make the basement into a workout area? It’s important to know your goal before you can crunch numbers. What you decide to do will impact the costs.

Look Over Your Financing Options

Maybe you have the cash on hand to pay for your remodeling project, but if you don’t, you’ll need to borrow money. There are many options to consider when it comes to financing a home renovation. You should consider: 0% interest credit cards, Home Equity Loans (HEL), Equity Line of Credit (HELOC), Personal or Unsecured Loans and Construction Loans. Find out more about potential financing in our feature from last year, Options for Financing Your Home Improvement Project.

Get a Quote from Contractors


In order to make a proper budget, it’s a good idea to get a free estimate from home contractors. If you want to be as precise with your budget as possible, you can also get a “hard” quote. A firm estimate will likely cost you money, but the contractor will provide an outline of the costs and the timeline to complete the job. If you’re comfortable with the contractor and the price, and you want to stay on budget, consider signing a fixed-price contract. This agreement means you’d pay a set amount for the project up front. Another option is a time-and-materials contract. This is an agreement to pay the contractor based on the time spent to perform the work, and for any materials needed.

Reserve Extra Money

You never know what will happen with a remodeling project once the walls start coming down or the roof is dismantled, so it’s a good idea to budget an additional 10 percent to cover unexpected expenses. If you don’t spend the extra money, you can put it toward another home improvement project, or just add it to your savings.

Trim Your Costs


When you’re budgeting for renovations, not everything has to be completed by contractors. Save a few bucks by tackling small parts of a project yourself. There are many ways to reduce labor costs, like ripping out carpeting in your living room or removing tile from a bathroom. When you decide to hire a contractor you can also save you a few bucks by choosing a less busy time to hire. Most renovation jobs are done in spring and summer, so look to commission work in the fall or winter.

Try Using Budgeting Apps

Using an app can help organize every element of your project budget. A good app will allow you to sync your computer and your mobile devices so you can bring up the information wherever you are, or if you need to make adjustments on the fly. Try an app like, which will let you track spending and savings, and make it easy for you to redirect money where you want.

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