Whether you’re squirreling away for a dream vacation or you are building a nest egg for a home renovation, budgeting is a simple tool that makes it easier to save up for large purchases.
Unfortunately when it comes time to start spending, sticking to a budget often proves tricky. From unforeseen expenses to last-minute splurges, many consumers find themselves blowing their budgets, which can have serious financial repercussions.
How to Avoid Going Over Budget on Home Renovation Projects
If you are determined to stay within the confines of your financing planning, use some of the following tips to stay on track:
Account for Extra Costs
Regardless of what you are budgeting for, the simple reality is that extra costs have a sneaky way of showing up. From bank fees to fluctuating prices, the myriad of factors that have an impact on your budget run the gamut. To keep yourself from hemorrhaging money, factor wiggle room into your budget. Experts suggest a 10-20% cushion can prove immensely valuable in keeping a budget on track.
Develop an Eye for Value
While it is tempting to throw caution to the wind and spend like there is no tomorrow, it is essential to develop savvy spending habits. One simple way to ensure your purchases respect your budget is to keep an eye out for great values. From everyday trips to the grocery store to airfares, building materials, and so much more, the prices you pay may vary greatly from competitor to competitor. Shop around, look for advertised specials, and snatch up discounts whenever you see them.
Don’t get Duped with Hidden Costs
One of the most common pitfalls in spending your money is hidden costs that weren’t clearly communicated beforehand. You may not find out about an extra fee that a hotel charges until the night you get there. Your biggest guard against these traps are customer reviews.
These hidden costs are actually most common in home improvement projects. Contractors exceed budgets frequently because they plan poorly and get too aggressive with competitive quotes. It’s important to do your research before hiring a company. Try resources like the Better Business Bureau, Angie’s List and customer reviews are a great starting point.
Pay Close Attention
At the end of the day, breaking your budget often comes down to one simple fact: irresponsible spending. For example, if you save for months for a dream vacation, you may not want to pay attention to the endless stream of cocktails you purchase poolside. Unfortunately, if you don’t tally your daily expenses, you may find yourself facing a massive pool of your own when you get back: debt. Make it a habit to monitor your financial accounts daily and track your expenses to ensure your spending stays in line with your budget.
If you are one of the many consumers who sees budgeting as a chore, you need to rewrite how you look at financial planning. While budgeting certainly takes a bit of work, the results of mapping your expenses can have a wonderful impact on your quality of life. By using these simple guidelines, you’ll avoid going over budget on home renovation projects.
written by: Hannah Whittenly