3 Reasons Your Renovation Budget Fails & How to Fix to Recover
When it comes to your household renovation, a budget is as necessary as any hammer or saw in your garage. This financial tool helps you set a practical limit to your project, so you don’t go overboard and spend all your money.
But let’s face it—one day, you might run out of money before you’re done. If that day is today, don’t panic. Let’s look at why you’re in this mess to begin with before offering a tailored solution to your money issues.
Problem #1: You Hit an Unexpected Snag
An unexpected emergency can derail your renovation and, depending on how big it is, suck all the money out of your budget.
Maybe you accidentally fall off your ladder and face unanticipated medical bills, lab tests, and hospital parking fees. Or perhaps you find extensive rot and mould in the joists after tearing up the old floor.
Most professionals recommend saving a cushion to accommodate these issues, tagging on an extra 25% to your projected costs just in case of an emergency. But there’s a chance even this generous cushion isn’t enough.
Solution: A Line of Credit
When your budget falls short of what you need in an emergency, a line of credit can pick up the slack. If you already have one at your disposal, you can withdraw money from this account to repair mould or cover medical equipment.
If you don’t yet have a line of credit, you’ll want to look for lenders that work with your emergency’s timeline. A lender such as Fora Credit offers simple and convenient applications that you can start online as soon as things go wrong with your reno.
Problem #2: Your Contractor is MIA
If you plan on taking your home down to studs, you usually need a builder or contracting company to help. Professionals ensure the job gets done right and according to the latest building codes.
Unfortunately, some companies are less than professional. They might take your deposit and run without doing any work, or they may get halfway through the job and never return.
Even worse, they might leave you in a lurch with faulty or underperforming machinery. In such cases, you may consider seeking aftermarket parts for heavy equipment. These parts, which are not made by the original equipment manufacturer, can often be easier to acquire and more cost-effective.
Solution: Get Litigious
If you hired a licensed plumber or electrician, reach out to their trade authority to make a complaint against them. While most authorities won’t offer arbitration services in these situations, they can apply pressure by threatening to suspend their license.
By nature of being licensed, a contractor will also be bonded and insured. This means you may be able to tap into their bond after you lodge a complaint against them.
If nothing else works you can take your contractor to small claims court or take legal action against the company.
3. Your Budget is Incomplete
You might run out of money mid-project if you don’t budget properly. This can happen to even the best DIY-ers.
In your haste to get started on your project, you might not price out everything as carefully as you should. Working with vague numbers instead of concrete costs, you can wind up spending more than the cash you have on hand.
Solution: Scale Back
When bad planning is at fault, scale back your plans. If leaving the project unfinished would be unsafe, you can tap into your line of credit. Otherwise, prioritize essential work over cosmetic upgrades to stretch your dollars as far as they can.
Running out of money in the middle of a project is not just frustrating, it’s stressful. Save yourself the worry by remembering these tips for the next reno.
