Its very common to hear of people renovating and running out of funds before the work is finished. Some causes include not having a budget in the first place, having an unrealistic budget, not detailed enough or incomplete budget and, not tracking the spend.
Here are 5 things you must do to ensure you manage your budget accurately.
Fixed price quotes - I can’t stress this enough. Paying by the hour is like open access to your bank account. There’s no accountability on trades to provide quality in a reasonable timeframe. Unless you are very experienced, avoid trades that charge this way.
Buy your own fittings. - There are so many online companies that provide great service and ship directly to your door. This ensures you know exactly what that tap or sink costs and it's ready to go when the trade needs it.
Contingency - It’s very common for issues to arise that nobody could foresee and without contingency funds, you will over run your budget. As a rough guide, set aside 20% of the total budget to allow for the unexpected.
Prioritisation - Which item in the budget has top priority, second, third etc. Example, a kitchen sink would have a higher priority than painting the kitchen. If you happen exhaust your contingency funds, the prioritisation allows you to pause the lower priority items to ensure the higher priority items (including changes) are completed and paid for first.
Track your actuals - Each time a payment is made, update your budget to show that item as spent. The right formulas will help you see what you have spent in total vs what is remaining to spend.
If you have any questions or need help with your budget or any other aspect of renovation, feel free to get in touch.
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