How to Stay Within Your Remodel Budget

Here’s how to avoid overspending without sacrificing your vision.


Before beginning your remodel, assess how much you want (or have) to spend. This means that in order to keep track of your renovation project you need to decide what, exactly, you’re going to do.

Study the area you’re remodeling, then note exactly what you need to do; install new or repair the existing drywall, paint, new fixtures, etc.

Then, make a “dream” list of every single change you’d like to make for that area. 

After you’ve put together your budget from this list, you’ll be able to narrow down the list according to the resources you have available – rather than building up your list from a smaller one.

This also ensures that whether or not you make the changes now, you have a blueprint of what you’d like to do to improve your home that you can come back to (and change as needed) over time.

Once you’ve put your list together, mark what you want to do in order of when it should be done. (e.g. plumbing needs done before painting the kitchen wall)

Be realistic

Focus on your NEEDS as opposed to your WANTS for a remodel job. Don’t let yourself get sidetracked…be realistic about what you can do.

For example, if you’ve created your budget and it’s based on you doing the work yourself or finding reclaimed wood for your new living room floor,  you’re setting yourself up for the potential to exceed your budget.

Instead, to keep from blowing out your budget start with a spending plan that’s a “middle of the road” estimate.

For example, if you work your budget on someone else doing the work (and you end up being able to do it yourself) pat yourself on the back…you’ve just saved money.

If your budget is realistic and it’s just too high you can adjust the scope or hold off the renovation until you’ve saved more money.

Keep in mind when deciding on a budget don’t expect a dollar return on every dollar spent…it just won’t happen.

Give yourself at least a 15% to 20% cushion to deal with unexpected costs that might arise.

Cash or finance?

Know what you’re paying for if you’re borrowing money to remodel your home. 

When it comes to financing your project, pay close attention to the costs; home equity loans, borrowing from your 401(k) or using a credit card all come with different costs. 

Use installments when possible; don’t pay for everything upfront. (unless you’ve already saved the money for your project)

Be specific

Yes, budget for the screws, rugs and cabinet hardware…little things can really add up.

If you’re hiring contractors for some or all of the work, be specific in your project details to get the most accurate estimates.

But before speaking to the contractor, think about the materials, the layout and the scope of changes you want to be made.

Here are some things to consider when hiring a general contractor:

  • ⬥ Changing your mind after work has started can boost your bill by as much as 10%.
  • ⬥ Make sure your contractor is licensed and bonded.
  • ⬥ Get a pre-inspection report to find any unknown structural damage. If these things are found you can adjust your budget before the work begins.
  • ⬥ Many contractors are willing to haggle, so it doesn’t hurt to try. Some will even drop their price if you do business with them again or remodel several rooms at once.

DIY or Get Help

Ask friends and family for recommendations of contractors they may have used in the past. Also, get quotes from different contractors (at least two of them) to get an idea of what your costs will be.

If there’s a huge difference between them, get a third contractor to give you a quote to decide what the average costs are in your area.

Maybe you’re able to be your own general contractor you could save as much as 10% on top of remodeling costs (which is what a general contractor typically charges).


Be careful not to add improvements that aren’t found in your neighborhood (e.g. a pool or room theater where nobody else has these) as you’ll never get a return on your investment.

Think about how long you’ll be in your home. 

When deciding on a remodel apply the 5-year rule; if you plan to own your home for 5 years or less, consider resale value in your renovations.

If you plan to keep it for longer than 5 years, do the renovations for yourself.

DIY as much as you can to save on labor costs, but only if you’re confident in doing the work. You don’t want to call someone to come fix your mess (for a cost that could be more than if you’d hired them from the start)