Are you planning to improve the condition of your home? Do you feel that it is time to give the place a complete makeover? If this is how you feel, that’s fine: however, you really need to take into account the financial side of things, as this is very important. Without proper financial planning, or the money to complete the task, your home improvement project could turn into a disaster. To save you trouble and to contribute to your project going as smooth as possible, here is a guide to financial planning for home improvement projects.
First off, you’ll need to decide who will actually be doing the work on your home. Will you be hiring a contractor: or, will you be doing the work yourself? Your answer to this question will make a difference since you’ll have to compensate the contractor for his work. On the other hand, if you are going to be doing the work on your home, you’ll be saving quite a bit of money. But should you decide to hire a contractor, you’ll need to factor this into your budget and do some shopping around to see which prices you can afford to pay. Once you’ve found the contractor of your choice, it is now time to plan a budget for the materials you’ll be needing.
Setting aside a budget is a crucial part of your home improvement project, as you’ll need to be organized about your spending. When planning your budget, round up higher than you want to spend. Doing this gives you some lead way just in case something unplanned should come up during your project requiring you to spend a bit more money than you actually planned.
Now say, for instance, you don’t have the money to spend on home improvement. If this is the case for you, don’t fret. There are a few options you can utilize to make it happen.
The first option you can use is your credit card. If you have a high spending limit, this will work to your advantage. The only risk is that you may have a higher interest rate when paying back the money, and failing to make payments on time could damage your credit.
The second option is getting a home equity loan. This may have a cheaper interest rate than your credit card and be slightly easier to manage: however, failing to pay back the loan could result in the loss of your home, which would mean that you worked on it for nothing. So, if you decide to use this option to finance your home improvement project, pay everything back and do it on time.
The third option for financing your home improvement project is to see if the bank will offer you a loan. If you can get one, this is great as you won’t have to worry about the high interest rate that you would if you were using a credit card, and you won’t have the risk of losing your home that would come with using a home equity loan. Not paying it back does risk bad credit: so, be sure that you pay back the bank and make the payments when you promise so you maintain good graces with the bank, as this would ensure they are there for you the next time you need them.
Whatever option you choose to finance your home improvement project is up to you. Just make sure you can handle it so as to not become stressed, and I hope that your project goes the way you want.