Home renovations are no small endeavor – no matter what they try to tell you on the home improvement networks. There are some situations, though, in which home renovations make financial sense and others in which they do not. Knowing the difference can save you a lot of personal and financial pain. These are a few questions you should ask before diving in that will help you make a wise decision.
How Will You Finance the Renovations?
If you have cash savings to fund the renovation or choose to go with a with a traditional, low interest loan it is a far different story than if you’re going to finance the work with credit cards or borrow from retirement funds. In order to determine how financially worthwhile the project is, you must be able to accurately predict (or at least closely estimate) the final costs of the project.
Interest rates on credit cards and cards from home improvement stores add up quickly and can easily become the expense the keeps on giving long after the renovation is complete.
If you’re thinking long term, think home improvement savings plan. This will allow you to set money aside each month to go towards things like improving your home cosmetically or taking care of emergencies that arise with heaters, air conditioners, roofs, or appliances along the way.
Who Will be Doing the Labor?
This is a multi-faceted question. If you’re planning to do the labor yourself, you can save a great deal of money on the renovation project – if the laws in your municipality allow for you to do the work yourself. Throughout California, for instance, there are a few things you can do on your own, but for the heavy lifting, you may need a licensed contractor to complete, or at the very least oversee, the work.
The other side of the coin to consider is that if you’re not confident of your abilities and press on trying to do it yourself, make sure you have room in the budget to correct mistakes you may make or replace items that may get broken in the process.
Some renovations typically provide a better ROI (return on investment) than others. Dollar for dollar, kitchen and bathroom renovations generally do well as do adding rooms or family rooms to the home.
Maximize the potential of your investments by choosing fiscally responsible updates. Rather than going for granite countertops, for instance and tearing down walls, consider a fresh coat of paint and quartz or other hard-surface countertops instead. Bigger bang. Lower costs.
If you plan carefully, and choose wisely, you can make renovations work well for you. Always look for renovation projects that raise the value of your home – especially if you’re planning to sell the home in the not so distant future.
Think about all the forms of communication you use: mobile phone, landline telephone, TV, and Internet. Generally, you pay more if you get these services from multiple providers.The more you bundle services with one provider, the less you’ll pay.
Cut back on your services
Most of us pay for Internet and cable TV services we don’t even use. Look at your cable bill and see what the charges are. You might find that you’re paying for movie, sports, or other special interest packages that you never watch. Call your cable company and cancel them. You can also scale back on your Internet services. Most Internet providers charge you for premium (the fastest speed). If you only use the Internet to send and receive emails, browse shopping and news sites, and update your Facebook page, you don’t need the highest speed available. See if your Internet provider offers lower speeds at a discounted rate.
Visit the library
You can borrow DVDs from the library for free. These are the same movies that the premium cable channels like HBO and Showtime air. If you rarely use the Internet, consider cutting out the expense all together and go to the library when you need to browse for something.
Cut the cord
Many people have canceled their cable television service completely because they’re able to identify alternative (yet still legal) ways to watch their favorite shows. Sites like Hulu.com stream the most recent episodes of shows within a day or a few days of their original broadcast date. If you don’t mind waiting until the current season is over, Netflix maintains libraries of entire seasons of hit shows. Many services like Amazon, Netflix, and Hulu also produce and stream original programming. There are monthly fees for these services, but they’re small in comparison to monthly cable rates.
If you’re a cable subscriber, check with satellite providers and see if they can save you some money – and vice versa. Be warned that recurring taxes and fees may reduce your expected savings. Ask for a sample bill or have the sales associate disclose all the recurring taxes and fees.
Negotiate your rate
You may find that another provider offers lower rates, but you’re reluctant to switch. Call your provider and let them know you’re thinking about canceling because you’ve found better rates elsewhere. Many providers will slash your bill for a limited time period or offer you a slightly lower rate indefinitely.
Some people pay the same for their TV and Internet services as they do on inexpensive cars. Imagine what you could do with the savings from reducing your monthly TV and Internet bills.
What suggestions do you have? What has worked for you?
If you can treat your tax refund as “found money” you can build, and add to your emergency fund each year without impacting regular lifestyle.
You might be surprised at what people will buy on eBay. You’ll probably sell anything you put out on the world’s largest garage sale.
Craigslist is another virtual garage sale. It’s great for local sales and when you have something hard to ship like furniture or a car. Include in the listing that the buyer is responsible for picking up the item.
Selling Your Books
Do you have books falling off the shelves? Or maybe you read on a tablet now. You may want to keep some, but sell the others. An easy way to sell your books is through Cash4Books. Open a free account, enter your books’ ISBNs (found on the back or inside front cover), and find out how much they’ll pay you. Shipping is free. Cash4Books pays you via check or PayPal and covers any applicable PayPal fees.
SellingYour Gold Jewelry
Selling your gold jewelry might fund your entire emergency stash. If you have jewelry you don’t wear, consider selling them. Keep your family heirlooms and pieces with sentimental value.
Working as a ChaCha Guide
ChaCha is a website to which people text questions about weather, sports, politics, and entertainment. If you’re signed on, you continuously receive questions. For every answer you provide, you get paid. ChaCha isn’t always hiring Guides, but you can get on its waiting list.
Save Your Change
Saving your coins is an easy way to build up your emergency fund. Empty your pockets or purse into a jar every night. You’ll be surprised how quickly your emergency fund will grow.
Become a Test User
Sign up at UserTesting and make money reviewing websites and apps. After visiting a website or an app and completing a set of tasks, review the website and get paid $10.
Be a Title Editor
Demand Studios hires titles editors. You can earn a decent amount of money if you know grammar rules and are a good speller.
Be a Freelance Writer
If you’re a good writer but don’t have the time or resources to gain clientele, consider applying to one or more freelance writer sites. The site recruits both the clients and writers. Writers pick assignments based on their knowledge, experience, and passion. Most writing sites have an application process that involves submitting a short writing sample. Popular writing sites include Word Gigs, TextBroker, WriterAccess, and Elance.
Be a Guru
Sticking with the freelancer theme, Guru hires talented freelancers and matches them with clients that have jobs in their specialty area. Guru areas of expertise range from software and IT to management and finance to admin support.
Good luck building your emergency fund. Some of these ideas may be a little extreme, but being strapped for cash during an emergency can be worse. Hopefully, these tips were helpful for establishing your fund.
Are you able to stick to a family budget? Do you have trouble getting your family on board?
It’s not uncommon: She’s a saver, he’s a spendthrift or vice versa. But no one – even spendthrifts – really doubt the value of saving money for a rainy day. At the same time, no one wants to feel controlled, and no one wants to be the one doing the controlling.Getting family spending on track takes more than just one person. It needs the support and participation of the whole family. So kudos for trying to get everyone on board.One idea: Get away from the term “budget.” The word often feels negative, say some experts. Others who have tried to stick with a budget and failed report they felt like the budget controlled them, rather than the other way around. To maximize your chances of success, try these tips:
- Call it a spending plan – and ask your spouse to help you create it. After all, he’s a lot more likely to adhere to a plan he helped develop than to one he feels was imposed upon him.
- Build in an occasional splurge. Just control it! Make it part of the plan. A “date night” (movie, a dinner out, etc.) a weekend away – whatever it is. Some people blow it once and give up, thinking it’s hopeless. But if you plan for it, you will still stay on track.
- Save for a goal. Some people don’t want to save just to save. But if they know they are saving for something specific and worthwhile, such as a down payment, or to become debt-free and see progress being made, they are more committed to making it happen.
- Get the kids involved. For example, tell them you’ll take them to their favorite restaurant, or a beach outing once you reach a certain milestone. Track your progress on the refrigerator door, where the kids can see it. They won’t hesitate to remind you to stay on track!
*This worked well for me when our house was on the market. We needed the house in “show condition” every day and anyone who has a teenager will understand the struggle of keeping things neat and tidy. We offered a beach trip if the house sold quickly which motivated our daughter to help out.
- Try online tools, like Budget Tracker. But keep in mind that some people just do better with an old-fashioned paper system! Whatever works for you, do it. Don’t get hung up on a particular tool or system. Focus on your goals, not the gadgets!
Above all, remember that perfection is the enemy of the good. A decent spending plan that your family accepts, and one they can start now and stick with, is much better than a perfect spending plan that no one else in your family will accept.