3 Steps to Budgeting for Your Kitchen Remodel
Kitchens are among the most requested upgrades made by homeowners. The emotional and financial benefits of a kitchen remodel have drawn many people to invest in this type of renovation. The enhanced functionality and improved aesthetics increase homeowner satisfaction and pride. It also offers a good ROI that increases a home’s overall value. A major kitchen remodel has a return on investment of more than 90% of its value.
Republic West Remodeling has been designing and reinventing kitchens for years in the Phoenix area. We have transformed outdated, cramped, kitchens with faded cabinetry and flooring into beautiful, modern spaces that our clients felt proud to show off. If you are ready to turn your kitchen into a fun, inviting place where you can prepare meals and socialize with confidence, then it’s time to make a budget for some improvements.
Here’s how to budget for a kitchen remodel in 3 steps.
Step 1: Find Out How Much It’s Going to Cost.
Finding out how much you need to save or finance will determine how long you need to save or the amount of your loan. You can get a good idea on common cost factors by getting quotes from multiple contractors or by exploring an online kitchen remodel budget estimator.
A minor remodel involves altering the appearance of the kitchen without changing it structurally. Because this project is less intrusive, it takes less time and materials and therefore is more affordable than a major remodel. Here are some tasks associated with a minor renovation:
- New or refaced cabinets
- Light fixtures
- Storage solutions
A major remodel has no holds barred on what your imagination wants. Are you looking to make an addition to expand kitchen space? Do you want to knock out a wall that the previous owners loved in the 90s? This kind of project involves demolition, reconstruction, and dramatic results. In addition to everything mentioned on the minor remodel list, here’s what sets major remodels apart:
- Creating a new kitchen layout
- Knocking out walls to build an open concept
- Adding an Island
- Reworking electric, plumbing, and other systems
When you get the average prices for these improvements, insert these costs into a kitchen remodel budget worksheet.
- Note: If you need to figure out what you want, our kitchen elements checklist can help.
Step 2: Decide on How You Want to Pay.
Your method of payment determines much about your budget. Are you working with existing cash assets, or do you need a loan? If you’re paying with cash, things will be more straightforward. For starters, bring up your bank account and see what you have to work with. Different financial experts recommend keeping savings up to a certain amount that you should not tap into, such as six months of mortgage and living expenses.
If you don’t have a surplus in your savings account, it’s time to start setting money aside every month for your remodel or talk to your bank to see if you can take out a line of credit, home equity loan, or a personal loan to finance the remodel.
If you decide to borrow from your home’s value, be sure to figure in the new monthly costs of paying back the loan into your income to ensure affordability. Can you handle the extra pinch after the new monthly payments kick in? You should consider these factors before you begin.
- Note: It’s important to keep in mind that you’re investing in your home, so the money you’re putting into it isn’t just disappearing. This is a critical mindset to have when it comes to renovations. Unlike a beach vacation where all the money spent is out the door, you can retain most of the wealth from your remodel by putting it into your home.
Step 3: Get a Solid Quote.
While you can go on the internet and Google the average prices for certain improvements and get a general idea for what you need to pay, it’s better to get a guaranteed quote from a professional contractor. This is because the materials, cost of labor, and rates in your area can be vastly different from the national averages that you find on a generalized kitchen remodeling budget calculator.
When you consult with a local designer who presents you with a plan, a list of costs for specific materials and labor, and a promise to stay within that budget as close as possible during the project, you can set a budget with confidence.
Kitchen Remodeling in Metro Phoenix
Republic West Remodeling and Habitat Renovations have combined to offer you an even more comprehensive design team that can create an excellent plan for your next kitchen renovation.
Contact us to schedule a complimentary consultation.