I’ve spent the last year remodeling my new home and after receiving questions asking how I managed it, I thought I’d share my top tips with you guys. When you start any renovation project, the first thing you need to think about is budget. It’s a huge factor that can’t be ignored, but one that can be a little less scary when managed properly.
I started using You Need A Budget (YNAB), which has really helped me better understand how to plan and stay within a budget. And to adjust my budget when things come up like the COVID-19 pandemic. YNAB teaches four simple rules that show you how to stop living paycheck-to-paycheck, get out of debt, and save more money so that you can spend it on the things that matter most to you. In my case, it allowed me to splurge on some items in my home, without feeling guilty afterwards; because I felt totally in control of my money and my budget. Watch YNAB’s free video trainings and live workshops, learn the method, join the community, and sign up for a free 34-day trial (no credit card required).
Here are the four rules from YNAB that helped me plan my home remodel.
Rule 1: Give Every Dollar a Job
As soon as you get money, you’ll decide what it needs to do—whatever is most important to you. Then, instead of deciding to buy something based on your mood, or the big (or small?) pile of money in your checking account, you’ll decide based on a rock-solid plan.
Start with planning how each dollar is going to be spent. Whether you have a small or large budget, this is a tool that can help prevent unnecessary spending. If you already have a style inspiration in mind that you want to create, make a list with the most important tasks you want completed first. Once you know what matters most to you, you can start to allocate money based on order of importance. I found this useful at the beginning of renovation because I knew I wanted to use large marble slabs and tile that were going to run up the cost within my budget, so I kept that in mind when making decisions on other finishings in the house.
Rule 2: Embrace Your True Expenses
Take those large, less-frequent expenses (that usually send you into a financial tailspin) and break them into manageable, monthly “bills.”
If you know you’re having a large bill coming up like for example, (house mortgage, rent, car payment, etc.), set aside a little bit every paycheck. This way, even if you’re busy with other things like work, your dogs, or spent too much time comparing color swatches, you’ll be prepared and won’t need to panic when you see the total. For me, I was spending a lot of money on my renovation, and at the same time not making the same amount due to COVID-19 pandemic. It was helpful for me to set aside these dollars for my regular expenses of office rent, home mortgage, car payment, groceries. Of course, unexpected expenses can occur, especially in renovation, but planning ahead for the big costs can make you feel more at ease.
Rule 3: Roll With The Punches
When you overspend in a budget category, just adjust. No guilt necessary. If you plan to take the kids to the beach but it’s pouring down rain, do you still go? Of course not! Circumstances change and plans change with them. Your budget is no different. If you overspend in one category, free up money from another category and move along.
This rule ties back into rule 1 when I mentioned the tile and marble costs were higher than expected. How to manage issues like this is to address the category is which you are overspending, and take those funds away from a different category that is less important to you. For example, when I realized how much the marble I wanted was going to cost, I took away funds from my pool budget since I knew I could source cheaper material to finish that project.
Rule 4: Age Your Money
When you are spending money you earned last month, you will have nothing to stress about money-wise. The goal is to be spending money that is at least 30 days old.
Be purposeful about your spending. If you see a stunning lamp that you can’t live without, figure out something else you’re willing to give up in order to have the lamp without overspending (remember rules 1-3!). That being said, also be very realistic about the funds you have and make sure you’re spending less than what you earn. Being consistent in all of these tools have been crucial in planning out how my dollars work for me, especially in this current time of uncertainty.