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Transformation: Making a Budget

Splurge or Save: Budgeting for Your Home Remodel  

By Tobi Fairley

Budgeting for a home renovation can be tough. Things always cost more than you think they will. I’ve worked in the industry for 17 years and the costs of home renovation and decorating still surprise me!

Typically, you can count on $100 to $200 per square foot for major construction or renovations, but this range may change depending on where you live. And this figure does not include furnishings, which could run anywhere from another $50 to $250 per foot, depending on what you need and how decorated you envision your home. If you are going for a magazine look, complete with custom drapery and many unique design details, you are likely looking at a minimum of $100 per foot for each room you are decorating and furnishing.

Items that you need to consider as you think about construction or renovations include appliances, AV, flooring, construction labor costs, plumbing fixtures, heating and air (HVAC), lighting, cabinetry and millwork, paint, electrical work, and finishes like tile, stone, and countertops. There are so many details and you want to have a line item in your budget for each of these categories to avoid surprises later. If you are also renovating your exterior, you will need to consider things like roofing, windows, shutters, columns, exterior paint, doors, brick or hardy board, and landscaping.

And if this weren’t enough to think about, you should always budget in a cushion. Things always cost more than you think, and you could hit a snag you weren’t expecting, like water damage or unexpected issues with plumbing, electrical, or even your foundation. I always plan at least an extra 30 percent of the total budget as a contingency for these unforeseen situations.

Be sure to think clearly about where you want to splurge and where you want to save. For me this means considering the wish list of everyone in the family. Also think about how often you are really going to use things. If you love to cook, appliances may be the most important priority for you. If you entertain more than you cook, maybe you want the kitchen to look gorgeous with new cabinetry.

Be careful with earmarking a large amount of your budget for something like accommodating guests for holidays only once or twice a year if it cuts into the budget for things you will use daily. For example, I would splurge on the shower in the master that you will use 365 days of the year over extra seating or making the living room larger to accommodate family just for Thanksgiving and Christmas. This practical approach is exactly how I make sound construction and design decisions.

Master bath before planning where to save or splurge

I’m so glad that I lived in my house before we started the remodel because it gave me new insights into what’s important to me and my family, and how we really use our home. It especially helped me see what wasn’t working about the home before we remodeled. I was able to plan perfectly for storage and organization because I got to study our patterns and see where all the clutter landed. I could include a basket or drawer or cabinet to organize these items in the future. I am definitely a person who wants a place for everything and everything in its place, so this “case study” of our home pre-renovation was a huge help.

Master bath after planning where to save or splurge

My splurges were definitely on the kitchen and the master bathroom, where the layout and design didn’t function the way I needed it to. In the kitchen, it was all about the appliances, cabinetry, and finishes for my “splurge” items, because my husband, my daughter, and I all love to cook and spend a lot of time in the kitchen. We wanted it to be both beautiful and functional to accommodate all three of us.

The key to planning where to splurge and where to save is to be honest with yourself and with your contractor. Let him or her know exactly what your budget is and what your priorities are for that money. It’s best to do all this planning well before you start the renovation. I know it’s hard to be patient and organized, but if you start spending on things that you could have lived without, you will run out of money for the things you truly want and need.

Happy budgeting!