With the combination of aging housing stock in a number of areas in the country, low interest rates and widely popular home renovation shows, and social media; more and more Canadians are embracing DIY. For some, it is a labour of love; for others, the intent is to increase the asset value of their homes.
No matter your motivation for renovation, the guiding point should be your budget.
- A recent CIBC poll shows that 37 per cent of Canadians plan to renovate this year. On average, they plan to spend $13,000
- Fifty-four per cent plan to do basic home maintenance; 42 per cent plan to focus on outdoor renovations, like landscaping and decks
- Indoor renovations were less popular with 33 per cent planning to renovate bathrooms and 26 per cent intending to renovate kitchens
- The biggest concern with Canadians taking on renovations is the ability to stay on budget as the project progresses. What’s even more concerning is that only a third of respondents said that they have a budget at all
“While investing in your home to increase its worth falls under the “good debt” category, spending beyond your means during a home renovation, is not a good financial move. Set spending limits and when the available budget is spent, it is spent,” says Jeff Schwartz, executive director, Consolidated Credit Counseling Services of Canada.
“The thing with home a renovation is that they rarely go as planned. They frequently take longer and cost more than you expect. Expect “surprise” expenses. Like with your household budget, you’ve got to leave wiggle room, says Schwartz.”
Here are some tips to help keep your home renovation project on budget.
Bang for your buck
If your main goal is to increase the value of your home (i.e. in the event that you want to sell it) certain areas will generate a better return on your investment. For example, kitchens are the most expensive to renovate but you get the most back in terms of increasing the home’s value.
Other smart spots to invest? Bathrooms and master bedrooms will get you bang for your buck too.
How to set a budget
Renovation budgets can balloon, so you need to be solid in setting your budget. Start out by determining how much you can afford, and then work backwards. Reduce credit use by setting up a special savings account for your home renovations before you even swing a hammer.
If you are using a contractor, make sure that you get several quotes and work with someone who is reputable.
How to save money when renovating
If your budget is tight for your project, you can save on costs by doing whatever you can DIY. Some projects require specialized training, but wherever you can lend a little elbow grease, you’ll be saving money. You’ll get more mileage out of your renovation budget and feel more satisfied when it’s done.
If you can’t fully renovate, consider budget-friendly space refreshers like paint or changing out the hardware in kitchens and bathrooms.
Did you know that there is good debt and bad debt? We can help you organize your debts to get back on track. Call one of our trained credit counsellors at 1-888-294-3130 or visit our free online debt analysis.