Developing a budget for your project can be a challenge. Sometimes you don’t even want to think about it. I encourage you to seriously consider it. Most people don’t have an unlimited amount of dollars to invest in a project, and knowing how much that budget is will help you allocate those dollars wisely.
How do you determine your budget? A good place to start might be a local realtor, or local paper, which will tell you what comparable homes in your area are selling for. You might visit a couple of the open houses just to see what upgrades and changes have been done to homes on the market. How long do you plan on staying in your home? The resale value of your improvements is less of an issue if you’re going to stay in your home and enjoy it for a long period of time. If you’re thinking that you’ll sell in a few years, it makes sense to choose the items which will offer the most interest to potential buyers. Historically, the best investments for resale are updated kitchens and baths.
The next step would be to speak to a lender to find out how much you can afford to borrow if you’re planning to finance the project. (More about that next month!) You may need to have a plan that allows for the remodeling to be done in phases over a year or two in order to get financing. It’s always best to know how much you have to work with before you begin. You can then make the decisions that allow you to remain in control of your finances instead of getting “knee deep” in a project only to realize that costs have gotten out of control.
I also suggest that you share your budget early with your contractor and designer. Knowing where you want to be allows these professionals to guide you to the right choices for your project. The “B” word – it’s not that bad!!