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6 Common Budgeting Mistakes to Avoid for Your Home Remodel

January 5th, 2024 | 4 min read

By Isabelle Braeutigam

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Are you feeling the weight of uncertainty as you contemplate the financial aspects of your upcoming home remodel? You're not alone.

Many homeowners face the challenge of figuring out costs and ensuring their budget matches their dreams.

With over 15 years of experience in remodeling, we understand the details of budgeting for home projects. We've seen what works and what doesn't, and now we're here to share our insights with you.

In this article, we'll guide you through common mistakes to avoid when dealing with the complex budgeting aspects of your home remodel.

  1. Underestimating Costs
  2. Overlooking Key Factors
  3. Ignoring Financing Options
  4. Cutting Corners
  5. Lack of Contingency Planning
  6. Not Comparing Quotes

By the end, you'll know common budgeting mistakes and how to turn problems into successes.

We promise to help you understand budgeting for your home remodel, so you can make smart choices that fit your vision and budget:

1. Underestimating Costs: Accurate Expectations Are Key

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When it comes to budgeting for your home remodel, accuracy is paramount. Start with clear expectations, whether doing it yourself, managing it, or hiring a contractor. Underestimating costs can lead to unrealistic expectations and potential disappointments down the road.

Popular media outlets like HGTV can be misleading. Depending only on these sources might give you the wrong cost ideas, especially for design-build projects. Additionally, this might cause more inaccuracies for DIY or self-management projects. Remember, the costs you see on TV might only include materials and leave out important things like labor costs.

Depending on which remodeling route you choose, there are key resources that will ensure your success with accurate budgeting: 

2. Overlooking Key Factors: Balancing Time and Money

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A huge mistake many homeowners make is not realizing how much time and money their projects will need. Understanding the relationship between time and money, especially about design-build experiences, is crucial.

For design-build projects, a lot of time is spent on planning, choosing materials, and dealing with the mechanical parts of the project. This thorough groundwork, typically achieved by the third design meeting, helps set a realistic budget.

Understanding the time it takes to create an accurate budget with your design-build partner will positively impact your remodel. A detailed approach at this stage of your journey can save you from diving into a project that may not align with your financial capabilities.

3. Ignoring Financing Options: Planning Before Finalizing Your Budget

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Before deciding on your budget, you must know your financial situation and check out loan options, like MSUFCU loans. Researching these financing choices helps you understand if your project is financially doable. This early planning gives you the power to set a budget that makes sense, so you can make smart decisions right from the start.

4. Cutting Corners: Prioritizing Project Quality

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Cutting corners, especially concerning project quality, can lead to dissatisfaction and long-term issues that will cost you more. Understanding the desired quality for your remodel is key. To ensure you receive the desired results, consult contractors for accurate quotes, explore the price points for various levels of material quality, and check Google Reviews or local forums for firsthand feedback.

Researching and understanding the quality you want takes time. Sometimes, lacking this knowledge can lead to subpar results. Here are a few ways you can research how to build your budget:

  • Checking online reviews of contractors in the area.
  • Talking to homeowners who have remodeled their homes.
  • Joining local forums to gain more insights into local contractors and preferred materials.

This ensures your project meets the standards you want.

5. Lack of Contingency Planning: Preparing for the Unexpected

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Remodeling projects often bring unexpected money issues, whether for you or the contractors. It's important to plan for unexpected things, like finding mold in walls or unforeseen conditions in your home. Remodeling is a messy process, and unexpected problems are inevitable.

A contingency fund of at least 10% of your budget is vital. Prepare for unexpected challenges by having resources ready to adjust the budget. The age of your home can also impact the likelihood of unforeseen issues.

Older homes might be structurally stronger, but they could have old plumbing, lead paint, asbestos, or other things that can make the costs go up.

6. Not Comparing Quotes: The Importance of Multiple Perspectives

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Deciding what's most important for your remodel—quality, budget, or another factor—is essential. However, getting multiple quotes to make an informed decision is also important. Each contractor operates differently, and understanding their systems can be challenging.

Asking questions and being curious during the quoting process will significantly improve your remodeling experience. Ask contractors 5-7 budgeting questions to gain a better understanding of the quotes. Being curious and open helps you understand the quote so you can make decisions that fit your budget and project priorities.

Next Steps to Budgeting for Your Home Remodel

As we finish exploring how to budget for your home remodel, let's think about the common mistakes and challenges we talked about. Feeling unsure, worrying about money, and fearing costly mistakes were genuine concerns we aimed to assist with.

In this article, we shared our knowledge and understanding from years of working with home remodeling budgets.

You've learned about avoiding mistakes and gained insights from others' experiences. This new knowledge empowers you to make budget decisions with confidence and clarity.

Through our 15+ years of remodeling experience, we have helped thousands of homeowners craft accurate budgets.

The journey doesn't end here; it transforms into the next steps you take toward your home remodel. Knowing common mistakes and how to avoid them helps you turn challenges into successes. Think of this guide as a starting point for a budgeting journey that leads to a successful and satisfying home transformation.

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Now that you know the common mistakes to avoid while budgeting for your home remodel, let’s explore the first steps of your project with Custom Built, how to budget for your build, and the top landscaping ideas for your outdoor living space:

Isabelle Braeutigam

Isabelle has worked at Custom Built for 7 years, learning the Custom Built Systems from all sides. She has become an industry advisor in the customer relations software HubSpot, has a keen talent for elements of design, and currently leads the marketing team under the innovative TAYA system.