Finances FYI Presented by JPMorgan Chase & Co.
With spring fast approaching, many of us are considering home renovations and upgrades. Whether you want to make your home more marketable to buyers or finally want the kitchen of your dreams, home renovations can be an excellent investment for just about every homeowner.
Saving for these renovations is usually the most challenging part of the process. We’ve put together a list of some simple tips to help you save for house upgrades and explain why these projects can be beneficial not just to your resale value but to your home’s efficiency as well.
Get Estimates Early
To properly plan your budget and savings, you’ll want to get detailed estimates early in the process. Fully research project ideas and costs online, schedule consultations with contractors to get estimates, and speak with neighbors about similar projects they’ve done to understand the entire picture of expenses. Material costs vary widely by region, so talk with suppliers in your area to get firm numbers. Be sure to add 10% to any final expense total for unexpected circumstances.
Create a Repairs Timeline
Saving for home repairs and renovations can be challenging without a specific timeline. Plan your renovation down to the day, so you have firm deadlines on costs. Detailed timelines will ensure your project stays on schedule and will give you targets to hit while building your savings – this will also help spread out large expenditures. Purchasing materials one week can help ease the burden of labor costs a few weeks later.
Plan How You’ll Save
How you save money within the set time constraints is entirely up to you. Many homeowners like to set aside a percentage of the expected renovation costs each month until they’ve reached their goals. If you’re planning on selling and are only renovating to increase your home value, consider using money typically designated for investments for the upgrades. The increase in sale value might return even more than traditional investment options.
Many homeowners create savings accounts specifically for home repair and renovation costs. Depending on your income, designate a percentage of your home’s current value to save each year. You can split deposits up each month or each paycheck, and it’s recommended to place at least one percent of your home’s current value into these types of accounts per year. You can use the money for small repairs and upgrades over time or let the funds pile up and tackle a significant renovation in one shot.
Keep an Open Mind
Being flexible and creative can help lower costs and make renovations affordable for almost any budget. Choosing to refurbish instead of replace is the first step. For example, try renovating your old cabinets with some fresh paint and new knobs instead of ripping them out for brand new ones. Take this approach across your entire home, as rehabbing old items will save you time on labor and materials.
Try a Little DIY
Another way to save big is doing some labor yourself. It’s essential not to take on tasks above your ability level, but any amount of prep work or labor you can do will lower your costs and make saving for the project more manageable. Tasks like sanding and painting can be done by just about anyone and can drastically cut down your final bill. Take the time to complete small preparatory projects yourself while saving up for the more significant work that requires professional expertise.
Sometimes, you’ve got to spend a little money to save money. Consider high-efficiency units if you’re upgrading appliances during your renovation. Newer technology can drastically cut utility bills, so the high upfront costs might pay off in the long run. Smart home devices like thermostats and lights can keep your usage and monthly payments low.
With some sacrifice and creativity, the home of your dreams is attainable! Be sure to research any ideas thoroughly, and complete more straightforward tasks yourself to keep labor costs low. Refurbish anything salvageable, and consider recycled materials to lower the amount you need to save. Once your target is set, start saving each month directly into a home improvement savings account, and before long, you’ll be ready to begin construction!
Finances FYI is presented by JPMorgan Chase. JPMorgan Chase is making a $30 billion commitment over the next five years to address some of the largest drivers of the racial wealth divide.