Guide to Planning and Sticking to Your Renovation Budget
October 4th 2023
Are you planning a renovation project but worried about overspending? You're not alone. It's common for homeowners to underestimate the cost of renovating their homes, and end up spending more than they can afford. However, with careful planning and budgeting, it's definitely possible to achieve your renovation goals without breaking the bank!
In Singapore, where property prices are high and renovation costs can add up quickly, it's especially important to have a realistic budget in place before starting any renovation work. Whether you're looking to upgrade your kitchen, add an extra bedroom, or give your entire home a facelift, a well-planned budget is key to making sure you don't overspend.
In this article, we'll take a deep dive into the topic of planning and sticking to your renovation budget. We'll cover everything from assessing your renovation needs to setting a realistic budget, and we'll provide tips for saving money along the way. So whether you're a seasoned renovator or a first-time homeowner, read on to discover how to achieve your renovation goals while keeping your finances in check!
Setting a Realistic Renovation Budget
Understanding Your Financial Situation
Before embarking on any home renovation project, it's essential to have a clear understanding of your financial situation. Knowing your income, expenses, and debt obligations will help you determine how much money you can realistically allocate toward your renovation. It's important, to be honest with yourself and avoid overstretching your finances. But if you’re not sure where to start, don’t worry. You can always try using budgeting tools or speak to a financial advisor. With that said, always remember that no renovation is ever worth going into significant debt for.
Researching and Estimating the Cost of the Renovation
Once you have a clear understanding of your financial situation, it's time to start researching and estimating the cost of your renovation project. This will help you get a better idea of how much you can expect to spend and where you can save money.
Start by breaking down your renovation project into its components, and researching the cost of each. This includes the cost of materials, labour, and any additional expenses, such as approvals, permits, or fees. You can use online calculators, speak with contractors and suppliers, or ask friends and family members who have completed similar projects for advice. It's also important to get multiple quotes to ensure you're getting the best possible price.
With that said, it’s also a financially smart idea to know the average cost so you can better gauge if you are receiving a good deal. According to value champion, it costs approximately S$45,600 for a moderate 4-room HDB flat home renovation. Specifically, here are the average costs for the 9 major components of a typical home renovation:
Of course, the renovation style that you pick can also greatly affect the overall cost of your home renovation project. As you can see, these are the average costs:
Setting a Budget That is Realistic and Within Your Means
Based on your research and financial situation, it's time to set a budget that is both realistic and within your means. This means that you should aim to spend no more than what you can comfortably afford, even if it means scaling back on your renovation plans.
To help you stick to your budget, consider breaking it down into smaller segments. For example, you can set a budget for each renovation component and track your spending accordingly. You can also set aside a buffer for unexpected expenses or contingencies to prevent going over budget if unforeseen costs arise.
Factoring in Unexpected Expenses
No matter how well you plan your renovation budget, unfortunately, unexpected expenses can and often do arise. To avoid being caught off guard, it's a good idea to factor in a contingency budget of around 10-20% of your total renovation cost. This will help you cover any unexpected expenses that may arise during the renovation process.
Remember, setting a realistic renovation budget is essential to avoiding overspending and ensuring your renovation project is a success. By taking the time to understand your financial situation, researching the cost of your renovation, and factoring in unexpected expenses, you can create a budget that is both realistic and within your means.
Tips for Saving Money and Sticking to Your Budget
Renovate in Phases
When it comes to home renovation, one of the most popular tips to save money is to renovate your home in phases. Contrary to popular belief, you do not need to do everything at once. Instead, you can break up the renovation work into various phases or projects over a few years. This approach will not only be easier on your finances but also allow you to take a more systematic approach to your renovations.
By renovating in phases, you will be able to avoid taking on too much debt or using up all your savings at once. This can be especially helpful if you have a limited budget or are not in a rush to complete your home renovations. Instead of renovating your entire home at once, you can tackle one room or area at a time, which will give you time to save up for the next phase.
In addition to financial benefits, renovating in phases also has other advantages. For one, it allows you to learn from your previous renovation works and avoid repeating the same mistakes. This includes selecting materials, determining your preferences, and whether or not you get along with your current contractor or interior designer. With all these factors in mind, you will be sure to save money on your next renovation project or phase.
If you choose to renovate your home in phases, you should consider the areas of your home where you spend the most time and the areas that need urgent renovation work. These are the areas that you should prioritize on your renovation journey. For example, if you spend most of your time in the kitchen, you may want to start there, while if you have a leaky roof or outdated plumbing, you may want to prioritize those areas first.
DIY Where Possible
Another tip to save money on your home renovation is to do as much of the work yourself as possible. While some tasks may require professional help, there are many DIY projects that you can take on yourself. For example, you can paint your walls or install new light fixtures, which can be done with a little bit of research and some elbow grease.
By doing some of the work yourself, you can save money on labour costs and avoid paying a contractor or handyman for every little task. Not to mention, you can even add your own personal touch to your renovation project! However, it is important to note that some tasks should not be attempted by amateurs, such as electrical or plumbing work. For these tasks, it is always best to hire a professional to ensure that the work is done safely and up to code. After all, the last thing you want is to end up with a DIY project that ends up with you spending more money in the long term.
Shop Around for Deals and Materials
When it comes to home renovation, shopping around for materials is one of the most important tips to save money. Different stores and suppliers may offer different prices and deals, so it is important to do your research and compare prices before making a purchase. In addition to physical stores, you can also check online retailers for better deals and discounts. For instance, online stores like Shopee or Lazada usually offer discounts on home appliances, so keep an eye out for such promotions. They typically offer more discounts on special occasions, such as 05.05 (5th May) or Black Friday. So do keep an eye out for them to get the best deal. In terms of contractors or interior designers, you might be surprised to know that you can even get them for "cheaper deals". Specifically, they often provide kitchen renovation packages with discounts if you opt for more than one service. Not only do such packages help you save money, but it also helps you keep track of the renovation better.
But wait, there's more! Certain materials may also be more cost-effective than others, so it's important to do your research. For example, instead of using natural stone for your countertops, you can opt for a cheaper alternative such as laminate or quartz. Similarly, instead of using real hardwood floors, you can opt for vinyl flooring that mimics the look of wood. Not only are these materials more budget-friendly, but they also require less maintenance in the long run.
Consider Refurbished or Re-Purposing Items
Another way to save money on your renovation is by making use of refurbished or re-purposed items. While it may be tempting to buy brand-new appliances and furniture, refurbished items can be just as good and come at a fraction of the price. In fact, Singapore has a number of well-known companies like Carousell that offers excellent condition second-hand furniture and appliances.
In terms of electronics, electronics crazy is another great alternative for refurbished electronics. But if you want to save even more money, why not consider upcycling your current furniture? For instance, if you have an old dresser lying around, why not refurbish them and give them a second life in your home? Not only is upcycling one of the best ways to save money, but it is also an incredibly eco-friendly approach. Best of all? It allows you to create unique design elements in your home!
Do Not Pick the Cheapest Option
While it may be tempting to always go for the cheapest option, it's important to remember that sometimes you get what you pay for. Choosing the cheapest option for materials, appliances or contractors may seem like a good way to save money, but it can end up costing you more in the long run. Cheaper options may be of lower quality, meaning they may need to be replaced sooner, or they may not be up to standard in terms of safety and building codes. It's important to choose quality over price and to always do your research before making a decision.
Avoid Changing Plumbing and Electricals
One of the most expensive parts of a home renovation is changing the plumbing and electrical. Moving pipes and electrical wiring can be a complicated and expensive process, and it's important to avoid unnecessary changes to your home's infrastructure if possible. Try to keep your renovation plans within the existing layout and avoid changing the position of sinks, toilets, showers and electrical outlets. This will save you a significant amount of money on plumbing and electrical work, while also avoiding any potential safety issues.
Use Your Existing Layout
On the same note, it's also important to use your existing layout whenever possible. Changing the layout of your home can be expensive and time-consuming, as it often involves moving walls, doors and windows. Instead, try to work within your existing layout and find ways to optimize the space you have. This can be done by decluttering, organizing and rearranging your furniture. You can also consider adding storage solutions like shelves, cabinets or closets to make the most of your space.
Choose Loose Furnishings
Want to save more money on your home renovation without sacrificing style or functionality? Then it's time to consider loose furnishings. Not only are they a cost-effective alternative to built-in furniture, but they also offer the flexibility to change up your interior design whenever you want.
While custom-built furniture may seem like a good investment, it can be a costly one. With customisation, design work, and workmanship all adding to the price tag, the final bill can quickly skyrocket. Worse still, built-in furniture can decrease the resale value of your home, as potential buyers may not appreciate your specific design choices. They might even negotiate for a lower price to compensate for the cost of renovating.
On the other hand, loose furnishings are affordable and readily available in a variety of styles to suit any aesthetic. Whether you're looking for a statement piece or a practical solution, you're sure to find something that fits your budget. And, with loose furnishings, you can easily change up your decor as your needs change. Turn a home office into a nursery, or add a cosy reading nook to your living room. The possibilities are endless!
So, if you want to get the most out of your renovation budget, skip the custom-built furniture and opt for loose furnishings instead. Your wallet - and your future resale value - will thank you.
Skip the Smart Home System
Sure, it's tempting to make your home "smarter" with the latest technology, but let's face it - building a smart home system can end up costing an arm and a leg. And if you're on a tight budget for your renovation, it's just not worth it. With renovation costs ranging from a whopping $2,500 to a jaw-dropping $20,000, building a smart home system may not be the best idea for those looking to save money.
But there's more to consider than just the cost. The more electronic devices you have in your home, the more susceptible you become to hacking and security breaches. And once a hacker gains access, they can do some serious damage - from stealing your bank account information to spying on you through your own security cameras. Plus, with technology constantly evolving, you'll need to keep spending more money just to keep up with the latest and greatest gadgets. So, if you want to keep your wallet happy and your home secure, we recommend skipping the smart home system altogether.
Keep Track of Expenses
If you want to ensure you’re sticking to your budget, what better way to do so than to track your expenses? Doing so doesn't have to be a chore. It can be a fun and empowering process that allows you to take control of your project and keep a closer eye on your spending.
Consider using a spreadsheet, budgeting app, or banking app to keep track of your expenses. These tools can help you stay organised and provide you with a clear picture of where your money is going. You can easily categorise your expenses and make adjustments as necessary, allowing you to stay on top of your budget in real time.
If you prefer a more hands-off approach, you could consider hiring a professional bookkeeper or accountant to help you manage your renovation expenses. They can help you set up a budget and track your spending, freeing up your time and allowing you to focus on the actual renovation work.
No matter how you choose to track your expenses, it's important to review your budget regularly and make adjustments as necessary. For example, if you overspend in one area, you may need to cut back on another to balance your budget. By staying on top of your expenses, you can avoid surprises and ensure that your renovation project stays within your desired budget.
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