Owning our first home for six months, I came to the realization that I wouldn’t mind if I never again walked into a Home Depot. The dream of homeownership came with the allure of home improvement projects, fuelled by their captivating appearances on HGTV. Yet, the reality of such tasks can be exhaustingly mundane and painfully costly. Upon our move, I wisely allocated funds for repairs and upgrades. We managed to change the flooring, remove some trees, install a kitchen backsplash, and purchase ample furniture.
For most homeowners, there is always a never-ending list of tasks. The key question then becomes, how does one gauge financial allocation for such improvements that not only adds to the livability but also increases property value? Here are a few pieces of advice.
TAKE THE INITIATIVE TO GET ESTIMATES
To let you in on a secret, about 80% of the work done on our house wouldn’t have been completed, had I not sought after an estimate. I was unsure if we would manage financially to cover various house projects. Like most, we have to balance other expenses, not forgetting the all-important mortgage repayments.
However, adopting a defeatist attitude from the start by presuming a project is unaffordable, curtails any likelihood of getting it done. Thus, taking the first step toward acquiring a realistic estimate is critical. Many contractors or shops offer free quotes.
Acquiring an initial estimate provides a realistic expectation of a project’s actual cost. For example, we entertained the thought of replacing our bathtub, which I presumed to be costly, and initially planned to discard the idea. Yet, after sourcing quotes, I realized this project was more within our financial grasp than I expected.
SEPARATE BUDGET LINE
Create a separate budget line to adequately account for home repairs to have a clear view of available funds for repairs and upgrades. Initial estimates will assist in deciding on the ideal sum to save each month.
A rule of thumb is to set aside 1% to 3% of the house’s value for annual repairs and improvements. However, you ultimately decide the specific projects you wish to undertake. Hence, it’s essential to bear in mind when drafting a realistic budget line.
Set up an automatic savings scheme where a deemed amount is transferred monthly to accumulate funds for home upgrade projects.
CUT BACK ON EXISTING EXPENSES
Due to Covid-19, we had to cancel most of my trips this year. Consequently, we were able to cover almost all our home upgrading projects. While I aim to have some traveling in the future, it is essential to review where you can decrease or eliminate costs that don’t align with your values, goals, and happiness.
ALLOCATE LITTLE BY LITTLE
You don’t require a massive sum to embark on a home project. Starting small, such as a paint job, can be quite efficient in budgeting for home enhancements. For example, Painting an inside room is quite affordable and can be managed within your monthly budget.
Opt for smaller tasks that have been niggling you, like changing doorknobs, installing a new smoke detector, or replacing the garage door opener for starters.
THINK OUTSIDE THE BOX TO REDUCE YOUR MORTGAGE
Consider creative ways to free up more funds. You could consider leasing out a room on Airbnb or rent out your garage for storage. Alternatively, thinking about refinancing your mortgage to save more resources.
PRIORITIZE HOME IMPROVEMENTS
Make a point of prioritizing home improvements if you aim to consistently budget for them. Look into earning additional income or possible DIY options to lessen the costs of some hefty improvement projects costs.
Try to immediately channel any unexpected income toward your home upgrading budget. We’ve found that regular improvements serve well, whether it’s small-scale tasks during tighter financial periods or massive ones during higher-income months. If a discount or DIY Avenues are available, they should be explored. Consistency is key, after all.
