How to Budget for a House Remodel Project

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Have a house remodel project but don't know how to pay for it? Here are 3 ways to save for it so you don't go into debt to remodel your home.

Americans will spend $310 billion on house remodel projects this year, according to a recent Harvard study. This is an increase from prior years and a good indication that the economy will benefit in many ways from this home remodeling trend.

It’s no secret that remodeling homes can be expensive, and as many homeowners know, the ‘to do’ list never really ends. There are always new trends, new ideas and new chips and cracks to repair!

My First Big House remodel Project


Before we even moved into our home a few weeks ago, we spent $1,300 refinishing our wood floors. It’s not exactly something I wanted to spend right away, but I knew that while the house was empty and we had not moved in yet, it was the perfect time to tackle this kind of house remodel project.

Our house had a lot of mismatched wood floors. Some were an old orange-y type of hardwood and other parts had wide planked maple that was stained black. I wanted the house to feel cohesive so we stained it all black. It looks awesome and is a nice modern upgrade for my 1940’s bungalow.

If I’m being honest though, the $1,300 hurt to spend, especially because we had so many moving costs and other unexpected house expenses. Usually I save for a long time for big purchases in my high yield savings account, but this one was something we decided to do last minute.

The reason is because I realized if I wanted it done in the future, we’d have to move all the furniture out and possibly our kids so we wouldn’t be around all the smells and chemicals that it takes to refinish floors. It was a “now or never” type of decision.

Budgeting for a house remodel project


Because I had to tighten my cash flow to get our floors refinished, I wanted to encourage others to actually budget and plan for a big purchase like this. It definitely feels better to save up for something over time and have the cash to pay for it. So, here’s how things really should be done when it comes to making a budget for a home remodeling job:

1. Research the Cost


We have a lot of smaller projects on our list like getting curtains and painting the kitchen, but a big-ticket item that we’ll have to save for is finishing our basement. This will involve getting new windows, refinishing the floor and putting up some sheetrock.

If we decide to get fancy, we might put a half bath down there since our home only has one bathroom total. (I know future buyers with older kids might need/want a second bathroom.)

As part of this process, we’ve researched the cost of the materials and labor. We’ve thought about what we can do ourselves and what we should hire out. For example I might take a stab at painting a concrete basement floor but I’m definitely going to hire an electrician when we need one!

When it comes time to actually finish the basement, we will get quotes from several people and we’ll go with the person or company who we think would be the best fit for us. Doing research is important because it helps you to approximate the cost of a house remodel project so you can save ahead of time.

*Related: Need to furnish your home for less? Read our guide on the best online furniture stores to score awesome deals.*

It’s also important not to overlook how you can use a 0% APR balance transfer credit card to finance a house remodel. If you don’t have all the funds saved yet, and used a credit card to fund the costs, you may be able to transfer those to a balance transfer card to greatly reduce interest costs.

Click here to compare balance transfer cards that offer 0% APR for up to 18 months.

2. Save in a Separate Account


It’s too easy to use the money that you save in your regular savings account. When you want to do a big house remodel project, you need to send the money away to live in another spot. This way, you won’t be tempted to touch it when Christmas rolls around or when you’re dying to go to the Caribbean in the dead of Michigan winter (or maybe that’ll just be me.)

I use Smarty Pig and I have for years, but there are other high yield savings accounts like CIT Bank pay .55 percent when you start with at least $100 and deposit $100 per month (more than the current national average!) so it’d pay to switch.

All that said, if you schedule an automatic withdrawal and send it to your house remodel fund every month, you’ll have enough money in there before you know it to complete your project.

Have a house remodel project but don't know how to pay for it? Here are 3 ways to save for it so you don't go into debt to remodel your home.

3. Save More Than You Think


You have to be prepared for things to go wrong when it comes to big home renovations. It might sound negative, but it’s also wise. You’ll work hard to save your money and budget for your project. It’ll take time to make a plan, speak with contractors, get recommendations and more.

So because you’ll spend all that time and effort making it happen, go ahead and save about 20 percent more than you will think you need.

In the worst-case scenario you’ll have to dip into your extra savings. In the best-case scenario, you can roll that money into the budget for your next project…because you know you’re not done with your house yet!


What’s the biggest house remodel project you’ve ever done? Do you have any tips for someone who might be considering a remodel or big project in their home?

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Catherine Alford is the go to personal finance expert for parents who want to better their finances and take on a more active financial role in their families.


  • Amanda @ centsiblyrich says:

    All great tips for a home remodel! Our biggest project was a sunroom addition last year (though we are home improvement addicts, so this was just one of many). We planned ahead and saved (and even DIYed half the project ourselves), but still went a little over budget. Doing the research on costs and then saving more than those estimated costs is great advice. It always costs more than you think it will.

  • Latoya @ Femme Frugality says:

    So far the biggest thing we’ve had to do was come and have someone work on our foundation. Luckily, it was paid for by the seller during closing;)

  • Ashley says:

    We put in a fence and finished our basement last year. My biggest advice is to do whatever you can yourself, even if it seems like a small part. Those little costs or savings add up. We knew we didn’t have the ability to do the drywall ourselves but with some help from YouTube, we were able to do the framing and baseboards and a friend helped with the electrical. We had the ceiling painted because we knew that would be easier to spray on (we left the ceiling open beams so it was a hard job) but painted the walls ourselves. YouTube has lots of good tutorials! My husband was even able to build the staircase railing himself. The other tip is to reconsider how quickly you need something done. We saved about $4k doing the fence ourselves. But that meant hand digging about 30 holes 3 foot each and then the steps on filling, setting, etc. Ideally we would have paid to have it done and it could have taken 3-4 days. But to save money, we just took it slow and did it ourselves. Digging two holes a night added up. It was worth it but we definitely couldn’t have done it ourselves as quickly as the experts could with their machinery and work crews. Sometimes that trade off is worth it and sometimes not.

  • DC @ Young Adult Money says:

    We bought a 1970s rambler four years ago and our goal is to renovate the entire place and rent it out down the road. Remodeling can vary so much in costs, though, that it’s tough to dive into projects. We have delayed pretty much any major renovations (and will continue to try to delay as it gives us money to invest, save, pay down debt, etc.), but we have done a lot with the yard. The biggest project so far has been removing a two-tier wooden retaining wall that was about 13 feet long and replacing it with a brick retaining wall that is nearly 40 feet. Huge project last Summer! I did almost everything myself though so the actual cost was very little in terms of $ – but not in terms of time!

  • Syed says:

    Remodeling is such a balancing act of time vs money. You certainly can do almost anything yourself, but it can take some time to learn and do. And if you make a mistake that requires a pro to come in, it might cost even more. So there is risk involved either way.

    We are planning to sell in the next 2-3 years so I actually had a local realtor go through the house and recommend any changes we should make. It was nice to have a list like that so I can do the DIY stuff along the way while making arrangements to hire a pro where needed.

  • Hannah says:

    This is my formula for a home remodel:

    Estimate the costs, double it, now add another zero.

    Do the same thing with time 🙂

    Actually, I’ve found that my cost estimates have been right on with our total home remodel, but we’ve been slower than expected.

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