Home Improvement Financing
A Guide to Manging Finances
Home improvement financing is the boring part of revamping your home. When you want to turn your house into the home of your dreams, it's always the money that brings you back down to earth with a bump. However, proper home improvement financing is vital for the success of your project. There's nothing worse than running out of money when your extension is half-built or you've only managed to re-panel two of the kitchen units. If you plan your budget ahead, you save a lot of hassle.
The first step to planning a budget for your home improvement financing is to break the project down into small parts. If you're planning a large-scale home project, encompassing the whole home, you should break it down several times and get quotes from several contractors.
The larger a project is, and the more areas of the house it involves, the more potential there is for budget meltdown. So, although it may suit your personality to sweep like a whirlwind through your whole house, you should think very carefully before you try to tackle everything at once. It's far better to budget individually for each room. The more detailed your budget is, the less likely you are to make mistakes about the final total.
Home improvement financing: the two main costs
The main costs to consider in home improvement financing are labor and materials. If you're doing the project yourself, you don't have to pay for labor , but you need to think carefully before embarking on this as a cost-cutting measure. You may be great at your day job, but what makes you think you'll be so great as an untrained plasterer? Sometimes hiring a professional actually saves you money, because it avoids costly mistakes. In certain areas, such as electrical wiring, trying to Do It Yourself might cost you a spell in hospital. Don't risk it unless you know what you're doing.
If you've decided to hire a professional contractor for your home improvement, make sure you shop around for the best quote. You'll get a better deal if you compare as many contractors as possible. However, that doesn't mean you should automatically go with whoever gives the lowest figure. Of course you want to pay as little as possible, but you also want the job done properly. See our page on using contractors for more advice.
As for the materials, you need to know what's needed before the project begins. Even if you're hiring a contractor, imagine you're not. Work out what materials you'd be using if you were doing the whole thing yourself. Your list should include everything that you'll need to buy, right down to the dustsheets. Don't leave anything off because it seems too minor; it's the small things that add up to big costs. Then find out how much these items would cost you. Then, when you're looking at contractors' quotes, you can compare their charges for materials with your own sums. A contractor's charges for materials should be less than the sum you've calculated, because professionals usually pay less than you'd pay in the store. If the charges are more, ask to go through your list with the contractor's list and compare notes. It might be that you've left something out, but the higher price might just be because the contractor is trying to rip you off.
Home improvement financing: pessimistic visualization is the key to budgeting
Extra costs are often added to your home improvement financing budget because you haven't really visualized the individual steps of the project. Perhaps you planned to move a light fitting because it's in the way of your new dividing wall. But you forgot to plan for the cost of rewiring the lights. Or perhaps you haven't allowed for the possibility of an emergency- for example, fitting your new bath causes a water leak that ruins the carpet, or you need to pay for an emergency glazier when you accidentally smash a window. So imagine all the steps, and imagine all that can go wrong at every point. It's not a very optimistic way of looking at home improvements, but budgeting for all eventualities will leave you much happier in the long run.