Renovating
Serial Renovators on How to Set Up and Stick to a Budget
It's not glamorous, but renovation budgeting bring major benefits you'll be thankful for, says fixer-upper Alice Pearson
Budgeting. It’s a love-hate relationship. Maybe better put, my husband loves budgets and I see them as a killer of all my designer dreams. How is it that without seeing any price tags my ‘I want’ radar is drawn to the most expensive piece in a store? I have come to realise that sticking to a budget is easier when I understand its value and its role in the overall planning of my projects.
There’s no glamour in doing budgets, but it is an essential part of your renovation planning and management to make sure you stay on track and don’t leave the bank account in the red when you’re finished.
A thorough budget, set up at the start of your project and monitored throughout, allows you to stick to any financial goals you have set for your project. Whether you have a fixed amount of money available, need to work out how much to borrow from a bank, or you are renovating to sell and know that any overspend will eat into your profit – a budget is the tool to give you control of your project and to help you achieve your financial target.
As professional renovators, my husband and I always renovate with the mindset that we are selling (even if that is not our intention), so our budgets are always set to a fixed limit to ensure we could sell the house for more than the price we paid for it, including all of the revamping costs along the way.
As professional renovators, my husband and I always renovate with the mindset that we are selling (even if that is not our intention), so our budgets are always set to a fixed limit to ensure we could sell the house for more than the price we paid for it, including all of the revamping costs along the way.
When you struggle with the desire to have a budget, or an unwillingness to devote too much time to it, it helps to remember why a budget is important and how it will help you throughout your project. So what makes a budget a good tool for your renovation or new build?
Thinking of renovating? Contact local builders near you for a cost estimate, browse images of their work and read reviews from previous clients
Thinking of renovating? Contact local builders near you for a cost estimate, browse images of their work and read reviews from previous clients
How building budgets help you meet your renovation goals
It is likely that one of your overall goals is to ‘complete my project spending under $XX’. I haven’t met a renovator yet who has not thought about money at all and never checked their bank account balance along the way. A budget helps you achieve your spending (or saving) goals.
It is likely that one of your overall goals is to ‘complete my project spending under $XX’. I haven’t met a renovator yet who has not thought about money at all and never checked their bank account balance along the way. A budget helps you achieve your spending (or saving) goals.
A budget will help you meet your goals
It is likely that one of your overall goals is to ‘complete my project spending under $XX’. I haven’t met a renovator yet who has not thought about money at all and never checked their bank account balance along the way. A budget helps you achieve your spending (or saving) goals.
For me, as someone who attempts to avoid my husband’s budgets constantly, I often have to remind myself we created the budget for the best outcome in our project. A budget doesn’t need to be a negative thing if you have set it well and work within it.
It is likely that one of your overall goals is to ‘complete my project spending under $XX’. I haven’t met a renovator yet who has not thought about money at all and never checked their bank account balance along the way. A budget helps you achieve your spending (or saving) goals.
For me, as someone who attempts to avoid my husband’s budgets constantly, I often have to remind myself we created the budget for the best outcome in our project. A budget doesn’t need to be a negative thing if you have set it well and work within it.
So how do you draw up a building budget?
Devising a building or renovation budget can be as simple or complex as you want to make it. Some people have a natural bent towards spreadsheets and numbers, while others only think about it when their credit card is declined.
For us, after we have created a plan for what we want to achieve, we create an Excel spreadsheet and input every cost we can think of. We will spend one to two hours creating the initial spreadsheet, talking through what we estimate different costs to be.
Browse more beautiful, contemporary bathrooms for inspiration
Devising a building or renovation budget can be as simple or complex as you want to make it. Some people have a natural bent towards spreadsheets and numbers, while others only think about it when their credit card is declined.
For us, after we have created a plan for what we want to achieve, we create an Excel spreadsheet and input every cost we can think of. We will spend one to two hours creating the initial spreadsheet, talking through what we estimate different costs to be.
Browse more beautiful, contemporary bathrooms for inspiration
We itemise all the key products where we would like to ensure a certain budget, such as in the kitchen or the bathroom. We also reference back to budgets from previous renovations to create price estimates or source quotes where we can. And we make sure we have a contingency amount in our budgeting, in case our cost estimates are not realistic or extra costs arise, such as building material price increases.
Our first budget is normally quite generic, but we subsequently add in more detail and break down each category.
Our first budget is normally quite generic, but we subsequently add in more detail and break down each category.
What may initially be a single line of ‘Bathroom $5,000’, will then be broken down into items I have sourced as well as quotes we have received from contractors. Based on our overall budget, I will source quotes for bathroom fixtures and fittings, which will then determine how much the plumber’s costs will be. This will then give me an indication of where I can either save or spend money; for example, if I can afford tiling or feature lighting.
Throughout this whole process we will update our budget from a cost estimate, to a quote, to the actual cost. Whoever is coordinating that element of the renovation will also update the budget; this ensures the budget is as accurate and up-to-date as possible.
Throughout this whole process we will update our budget from a cost estimate, to a quote, to the actual cost. Whoever is coordinating that element of the renovation will also update the budget; this ensures the budget is as accurate and up-to-date as possible.
As we receive quotes, pricing for materials, and make purchases we continually update our budget to make sure we have the most accurate costs possible. We have done this on all our renovations and kept good records of what we have spent, so we add in known costs where we can to make the budget as accurate as possible in advance.
There are software systems available for budgeting renovations, however, we have found that a working document is easiest for us to use together and is more straightforward. All of our spending is recorded on our spreadsheet, which also means we have a record to reconcile all our receipts against.
There are software systems available for budgeting renovations, however, we have found that a working document is easiest for us to use together and is more straightforward. All of our spending is recorded on our spreadsheet, which also means we have a record to reconcile all our receipts against.
Updating and monitoring your budget throughout your project allows you to stay on track. Then when you come in under your budget – from using your thorough cost-management skills – you can bank the savings and give yourself a pat on the back. Or, if I have way my way, spend it on furniture and decor.
Your turn
How have you managed to keep your building or renovation budget on track? Share your tips in the Comments, like this story, save the images and join the conversation.
More
Renovating your kitchen? Make sure you read this first: Where to Spend vs Where to Save on Your Kitchen Renovation
How have you managed to keep your building or renovation budget on track? Share your tips in the Comments, like this story, save the images and join the conversation.
More
Renovating your kitchen? Make sure you read this first: Where to Spend vs Where to Save on Your Kitchen Renovation