Given the limited number of times a person completes a kitchen remodel, it is difficult to understand and budget for these projects. Here are ten steps to help you manage spending for a kitchen remodel.
Establish a budget and keep it.
- At the beginning of the project, determine how much you can afford to spend.
- Consider how long you plan to remain in your house. If you plan to move within five years, only spend what you can expect to recover when you sell the house. If you will remain in the house for more than five years, be willing to do a remodel that will make your family most comfortable.
- Understand the home values in your neighborhood. Don’t over-improve.
Understand the break-down of costs. A general rule of thumb is:
- Cabinets: 35%
- Labor: 20%
- Appliances: 20%
- Fixtures: 5%
- Fittings/Other: 20%
- Plan for the unexpected. There are surprises in almost every remodeling project … for example, finding out-of-date wiring behind drywall. A rule of thumb is to set 20% aside to handle contingencies and surprises.
- Prioritize your desires. Write down your priorities so if unexpected costs hit your budget, you can stay focused on getting the most important items on your list. When setting your priorities, don’t forget to consider important goodies like crown molding or a fancy faucet. These are an important part of a project’s overall look and functionality.
- How will you pay for the project? There are a variety of means to pay for a kitchen remodel. These include cash, refinancing your home, or a home equity loan. Understand the pros/cons of each option to ensure choosing the one that best fits your situation.
- Should I stay or should I go? Living in a home that is being remodeled can be stressful. Make a conscious decision on whether to stay in the home or live somewhere else during the renovation. It may be a good time to get take a vacation to avoid some of the remodeling stress. If you stay, consider setting up a temporary kitchen in another room in the house.
- Reservations. With the kitchen being out of the commission, you will likely eat out more than typical. Plan for this in the remodeling budget.
- Track your budget. Create a spreadsheet, or whatever works best for you, to track your budget and actual expenses. This will help you quickly see if there are any overruns starting to happen, allowing you to manage it.
- Sweat equity. You may want to consider doing some of the work yourself. This may help reduce the cost of the overall project. However, if you take on some of the work, you will need to hit schedule deadlines.
- Avoid scope creep. Over the course of the project, you may be tempted to add “extras”. Adding options in the middle of the project is a great way to overspend your budget. Don’t be rigid, but be willing to say “no” if it does not fit with your key priorities and budget.
Feel free to contact us for help in planning your remodel and achieving your project's objectives.