If you are planning to remodel your home, chances are you are focusing on large projects, like bathroom, remodels, a kitchen remodel, or new flooring or paint for the entire house. Large-scale remodels like this can really add up.
That is why it is so important to have a budget before starting any planning. Having a rough idea of how much you are willing to spend on any given project or series of projects for home remodeling will give you a great starting point when it comes to beginning saving. Some ideas to consider as you begin saving for your home remodels include:
Create a Separate Savings Account Specifically for Remodels
One idea that can be really helpful in creating separate savings account specifically dedicated to your home renovations projects. You can contact a representative at your bank to do this, or if you bank online, you may be able to log into your account and create separate savings account all on your own.
Having a separate account allows you to earmark the money in it for specific purposes, instead of leaving it in your checking account where it may get spent, or leaving it in a general savings account where it might go towards other large purchases or you may not know what specific amount is meant for home remodels versus other things. Having a separate account also goes along with the next idea.
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Automatically Transfer Money to be Saved for Home Remodels
Once you have separate savings account set up for your home remodels (or if you do prefer to keep all your savings lumped together, you can focus on your regular savings account), you can automatically transfer money earmarked for your home Renos.
You can set up the automatic transfer yourself from your checking account if you have online access so that on certain dates, perhaps once a month or after each paycheck, a set amount of money is automatically transferred to your selected savings account.
If you want to skip this step altogether, you can even contact your employer to split your direct deposit and send a portion of your paycheck directly to your home remodel savings account, so you don’t even see that money in your regular accounts when you get paid.
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Save Windfalls
If you don’t have an excess to save on a regular basis for home remodels, consider if you have any windfalls throughout the year that can be set aside for savings for updates in your home. If you get a large tax return, a yearly bonus at work, or cash gifts for your birthday or holidays, consider setting that aside for home remodels.
Borrow Smartly
Given the sheer cost of some home remodels, you may need to borrow some money on top of the savings you are putting away. Some home remodels, especially larger ones like bathrooms or entire kitchens, can be very expensive and will call for some kind of loan.
As with any time you get a loan, if you are looking to secure home improvement financing, take out as little money as possible, and shop around for the best rates. You may even have a home equity line of credit already on your home that can be used for home improvements and remodels.
Any large project in your home will cost a significant amount of money. Planning ahead by creating a savings account specifically for home remodels, automatically transferring to that account, saving windfalls, and securing reasonable financing will help you upgrade your home beautifully.