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A Step-By-Step Guide to Budgeting for your Renovation Project (+ 5 Handy Budgeting Tips!)

Updated: Sep 6, 2023


 

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Dining room with table and chairs and chandelier


It may not be the most exciting part of a renovation experience, but budgeting is one of the most crucial. While some of us revel in number crunching and Excel spreadsheets, the rest of us fall asleep at the mere mention of the word 'budget'.

Needless to say, although unglamorous, creating and sticking to a budget is essential when embarking on a renovation. We've compiled a step-by-step guide to setting up an Excel budget spreadsheet as well as some useful tips that will help you plan and stick to a budget for your next project. What are you waiting for? Open up Excel and let's get started!


  • STEP ONE - On your spreadsheet, list as separate headings, the areas or spaces that you wish to renovate; for example, Living Room, Master Bedroom, and Bathroom.


  • STEP TWO - Under each heading, list (in separate rows) what you specifically wish to change. In the living room, for example, you may list 'new flooring', 'built-in bookshelf', and 'wall insulation' one below the other. The bathroom may be broken down as follows: 'new combined shower/bathtub', 'replace flooring', 'new vanity', etc.


  • STEP THREE - Now, under each of these sub-categories, as you start shopping around and finding items you may like for your renovation, add them in with their price. So, the 'replace flooring' might now have another sub-category below it that says 'tile'. In the 'cost' column beside it, add the cost for this item. The more detailed you are in terms of costings, i.e. appliances, cabinets, lighting etc., the more likely that you will come in on budget.

By listing things in this way, you can see at a glance where you are spending your money and also where you might be able to save.


Don’t forget to also add in your subcontractor’s quotes, and remember; your budget is a ‘live' working document and needs to be updated and monitored regularly to ensure that you are keeping to it.


5 Handy Budgeting Tips!


  • ONE - Ask yourself 'What are the non-negotiables in the space I'm renovating?' For example, if you are renovating your outdated kitchen, you may wish to replace the hob and oven, all cabinetry and perhaps replace the vinyl flooring. Work out which things are an absolute priority. Bear in mind that it would be easier to replace the flooring while all the cabinets are out rather than after! Doing things in the right order will save time and money in the long run. Remember too, that renovating can be done in stages. Do what is essential first, and the rest can be done at a later stage.


  • TWO - Look around to get a feel for what you like and make a note of the costs. For example, you may prefer bamboo flooring over laminate. Or you may want to install a state-of-the-art oven and hob. Whatever it is, make a note of all these costs and keep them in a spreadsheet for easy calculations (more of this in the next section).


  • THREE - Work out what your maximum spend is. You can do this by considering what you spent when you bought the house and what houses in your area are selling for, now. This will give you an idea of how much you will be able to reclaim when (if) you sell. As a rule of thumb, you should spend between 5% - 15% of your home value on kitchen renovations. So, if your home is worth $600,000, you will spend between $30,000 - $90,000 on the kitchen. A bathroom renovation is usually between 3% - 7% of your home value.


  • FOUR - Remember to allow about 10% on top of your budget for unforeseen costs. This is called a contingency fund. Most renovations tend to uncover other things that need work that you hadn’t planned for, but most likely make sense to be attended to right away.


  • FIVE - Do your homework and get the best contractor for your job. Aside from shopping around for the best quote, be sure that the contractor can guarantee a high-quality finish. A sloppy job completed within budget just means spending more to get it finished right. Less expensive materials can still give you a good look and perform well, but if you are just looking for the cheapest labour rate, you are likely to get below-the-par or unfinished work. Get referrals; talk to friends, co-workers and neighbours to get recommendations. Always be sure that the contractor has a valid building practitioner licence.


While Wellington builders Orkney can't take the budgeting job off your hands completely (sorry!), we can certainly help you do your best to stick to the budget you've set. As well as providing practical advice and guidance about materials and products you might be considering using, we can give you an idea of how much our labour will cost, and how long a job will take. With these last critical pieces of your cost projections in place, you can start making decisions accordingly. We also offer design and architecture services and painting and decorating if you need some guidance in these areas.


To talk to one of our team about getting labour/time estimates and budgeting for your next renovation project, please contact us.




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