We all want beautiful homes, but home improvements can put a lot of strain on your finances. Many people are put off the more extensive home improvements as as result of the financial difficulty, meaning their homes are not up to their standards, and they can become unhappy as a result. But home improvements don’t have to break the bank or leave you in dire financial straits, nor should you accept living in a home below your exacting standards. If your house needs a bit of TLC, keep on reading to find out how you could afford your dream home.
Make a plan
Other than an emergency boiler replacements or urgent repairs, most home improvement or decorative changes don’t just spring up from thin air. While you should always try to have a healthy financial buffer in a savings account for emergencies, the rest can be planned well in advance. Try to draw up a five year plan of home repairs, decoration, and re-buying furniture – include anything you envisage wanting to change throughout that time. Once you’ve achieved that list, you can start to plan when each change will be made and how it will be financed. Remember that you don’t need to overhaul your whole home in one fell swoop, but maintaining an overall aim keeps everything cohesive and reduces the likelihood of unnecessary expenditure.
Do your research and write your budget
Once you know what you’re going to change over the coming years and you have a good idea of the sequence of events, it’s time to start to research and plan for those changes. Consult a few builders, architects, or designers for quotes for work and labor costs, and start to cost the project. Bear in mind that this may alter the sequence of events slightly, either due to the differing professional advice, or your financial forecast. When you’re aware of your plans and their costs, you can start to look at ensuring you’ve got the money to pay for your changes. Doing it this way allows you to plan your home improvements on your own timeline, without necessarily paying out lump sums when you’re not in a position to do so.
So where does the money come from?
One way to ensure you can pay for each part of your home improvement schedule along the way is to allow a certain percentage of your income each month to be dedicated to your house. This will dictate the rate at which the work can be carried out, but it means that you will leave the project debt free. A popular alternative is to take out homeowner loans, which are secured against your home giving the lender more security. These types of loans are great for home improvements when you’ve got loads you would like to achieve but you just don’t have the capital or a great credit score, so you’re not likely to have access to other sorts of loans.
There are plenty of options for financing home improvements, from long term savings plans to homeowner loans. The most important thing is to be prepared, and aware of the costs of your project from the start – there is nothing worse than a surprise bill that just hasn’t been budgeted for.
Last year we proactively replaced our HVAC system. Our prior unit was over 15 years old and not very efficient at all. We saved for a full year and paid for the new unit in cash. They replaced all the duct work while the put in the new unit and it has made a huge difference.
We have a five year plan for our home improvements (ok it is a four year plan) like you suggest. The HVAC was the biggest on our list. All of the other stuff is fairly small.