Especially if you’re tackling a project that will make your house more green, you should feel good throughout the process, knowing you’re helping the planet too. Prepare for renovations with smart money habits well ahead of time to stay on top of any feelings of anxiety and stress due to budget.
Budgeting and building a cushion:
When you’re budgeting for your renovation it’s important to do your research ahead of time. At this point, you should know exactly what you’re looking to update and the general price. Getting quotes from different contractors that you trust in the beginning of the process can help you create a realistic budget.
The issue with creating a budget that usually slips the minds of homeowners is creating a cushion for unexpected expenses. It’s easy to forget about certain costs before you’re in the midst of the remodeling process, so planning for things like tax, shipping, and permits in your budget is a smart move.
A cushion of about 20% is usually a safe bet to cover forgotten expenses or unexpected things that tend to come up when remodeling an older home.
water usage monitorwater control valve
some water usage ideas to consider
Tap into your home’s value:
When you’ve gotten to the point that you want to remodel your home, it’s likely that you’ve owned it for some time and this means you can tap into the equity you have. You may wonder if refinancing is right for you to tackle your renovation, and depending on your interest rate and how long you have been in your home, it just may be the best way to go.
Refinancing your mortgage can allow you to lower your monthly payments, lower your interest rates, or even get cash for a remodel! Cash-out refinancing allows you take advantage of the equity you have in your home and to get cash on hand at a much lower rate than you would on other forms of borrowing, like a credit card.
Saving money:
The smartest way to pay for a remodel is saving the money, but of course, this will take some time. If you have months or years to plan for your remodel then saving money to make the green renovations you want is a smarter way to go so you don’t have to worry about debt or interest.
There are some easy, almost automatic, ways to put aside some money moving forward. Firstly, if you have direct deposit through your employer, you can have them allocate a percentage or set monetary amount to go directly into a savings account.
other valuable tips:
If this isn’t an option for you, applications like Digit use an algorithm to analyze your spending and withdraw money from your checking account and place it in a savings account. Even if within the timeframe you have you can’t save up the total cost of your remodel, putting aside any small amount will add up and be helpful down the road.
When you’re preparing to take your old house and modernize it with eco-friendly updates, the best way to feel good about the investment is to budget and talk finances well in advance. This will help you avoid the stress money can cause along the way, whether you decide to save, refinance, or pay for the updates another way.
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Image credit: fund green remodel by Pixabay
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