Financial planning for a home renovation that doesn’t wreck your budget

Creating a budget for renovation purposes is not easy when you are trying to respect a strict budget. Going over a previously set budget could lead to serious consequences that will be felt in the long run. Most people spend more than they initially planned to on home reno plans, which is not the desired result. In most cases, unexpected problems come up with the renovation itself, but you should be capable of planning a budget for unplanned situations besides the principal renovation budget.

This way, you’ll avoid reaching bankruptcy because of an issue that suddenly occurred. In other cases, the persons who run the home renovation decide during the process that they want some additional things changed around the house, which will require an extra amount of money to invest. This last case is not reasonable because when you engage in financial planning you’ll know for sure what you need to spend money on during the renovation. Not respecting what you planned won’t help with achieving the expected outcome and all the efforts will be in vain. Here are some tips that should guide you through the process:

Saving or borrowing?

The first dilemma of all people who want to renovate their home soon is whether to start saving money for the whole process or borrowing them. This is a sensitive topic since not everyone affords to save as much money as they would need for a complete home reno. If that’s your case, applying for a loan that’s especially purposed for this kind of activity should be just fine. On the other hand, if you feel like you could save enough money to start the renovation without additional funding, then go ahead and do so. In this situation, financial planning is even more important, as you may need to restrict your monthly spending in order to put aside a considerable amount of your income to start the home reno as soon as possible. Before making any decision, is important to understand how much a house renovation would cost you and what your desired outcome is.

After you decided, start putting your budget together. Any home renovation takes a while to complete, and if you are not paying attention to all the details involved you might have the surprise to spend more than you initially planned. This is the reason why you have to invest enough time and resources in planning your time wisely.  

Absolute requirements

The next step you should deal with has to do with the requirements that are absolutely paramount for the renovation. These are usually the priorities of the whole project. One of the requirements on this list should be the triggering factor of the whole renovation plan. Redecorating a house is not the same as renovating it. Renovations involve fixing issues that have to do with the quality of the house: changing flooring, repainting, upgrading etc. This is why you should start with creating a list with the absolute requirements that you need to consider for your renovation and decide how much money you want to invest in these. The rest of the things that need to be changed are less important and the budget allocated for them can be smaller. It’s important to establish a healthy contingency. Depending on the condition of your house, the contingency can be anywhere between 10% and 25%.

The lucky part is that you can opt for a home reno rebate program and get some of your money back. When dealing with major changes such as insulating your whole house, the investment is quite big and you might need to focus on saving as much money as possible. Rebate programs will help you get back a part of the money, which can be very useful for investing in something else that could make a difference. Every single penny that you save could help you change something, but bad decisions about how much money you spend could lead to going over your budget.


There are modifications that you will want to do only because you consider them relevant to improve the ambiance of your house. These are not absolute musts, but they represent changes that you want to make. You should think about whether you afford the changes you desire or not. In most cases, these changes can be done with less money than you think, if you have the time to look in the right places. Many sales and offers happen during the year, and if you know exactly what outcome you want to obtain, you’ll find cheaper replacements for the items you want to include in your house decor. All these modifications should be done in the form of a wishlist and you need to keep yourself flexible if you can’t afford to do one of them right now. There is plenty of time to add new upgrades to your house without going over the budget you have at the moment. Only make expensive changes when you are entirely sure you won’t have to go over your budget for them.


You should also keep in mind the size of your home, which can influence both the amount of money you will spend on your renovation and the time it will require to be completed. The size of your house and the paperwork for the renovation go hand in hand as well. For making major modifications to your house’s structure, you should keep in mind that you will need to obtain permits for excavations, demolitions, framing, plumbing and so on. For insulation or interior trimming, it’s easier to obtain the necessary documents, but it all depends on the plan of your house and its size. The size also influences how many materials you’ll need for the renovation. For a bigger house, the budget that goes into materials might be double. You should carefully calculate the number of materials needed, so you don’t buy more than you will consume for the home reno.

David Jackson

David is a personal finance expert, a professional male model, and an entertainment writer.