7 Renovation Rules You Can’t Afford to Ignore

Dear Rich Lifer,

According to a recent U.S. Census Bureau report, home centers, hardware stores, garden centers and building materials suppliers have seen a nearly 23 percent increase in sales year-over-year, the largest spike in all retail categories except for online purchases.

As more people spend time at home due to the pandemic, honey-do lists are growing fast. Fifty seven percent of homeowners report doing a home improvement project from March to May this year, says the Consumer Specialists and Home Projects Council.

The number one reason cited for doing home renovations was “having more time.” Another popular response was “time at home made me more aware of things that needed doing.”

If you have projects you plan to get done this winter but you’re afraid of breaking the bank, we have seven rules we suggest you follow to ensure your home renovation plans don’t blow up your budget.

And if job security is a current concern for you, watch this urgent prediction from the desk of Jim Rickards now. 

Rule 1) Beware Of Scope Creep

“Scope creep” is a term used in the world of project management to describe a phenomenon where work required for a project continues to grow after the project has started.

There are a number of reasons why scope creep happens, but three of the main reasons can be found in our next three rules.

Rule 2) Anticipate Unanticipated Repairs

In any project there are going to be unanticipated problems. There’s no way you’ll be able to predict what exactly these issues will be until you start the project. For instance, imagine you’re stripping paint off floor molding in your bathroom.

As you do the work, you realize the previous owners patched and painted the molding to cover termite damage. You can either do the same and repaint over the old stripped molding, or have all of your molding replaced.

While you can’t ever know what problems you might encounter in a project, you can always anticipate that there will be problems. This way you can build wiggle room into your budget for these unanticipated repairs.

Rule 3) Don’t Fall For The ‘While-We’re-At-It’ Trap

Another major culprit of scope creep is the ‘while-we’re-at-it’ narrative. This happens when you reason with yourself that you might as well fix whatever needs fixing now rather than wait. This thought is easily justified if you know you’re going to do the repair in the future anyways.

While this thinking can save you time, especially if you have momentum on your side, it will balloon your budget. So be sure to do the math and calculate how much the additional renovation will cost you before you move forward.

Many experts believe a major crash is coming, which is why staying on budget is more important now than ever before. (See why here.) 

Rule 4) Stay Within Your Circle Of DIY Competence 

The last reason why scope creep happens is your own incompetence. Sorry, I should say your neighbor’s incompetence.

We all have a “friend” who took on what was supposed to be a simple DIY project and it failed miserably. Not only that but this “friend” probably had to hire a professional to come clean up the mess, which ended up costing double what was originally budgeted for.

There’s no shame in hiring a pro to take care of more difficult or tricky tasks. Anything structural, plumbing related, or electrical should be left to the pros. Even though you might have logged an impressive amount of hours on the couch watching “This Old House,” there’s no substitute for hands-on experience.

Rule 5) Write Down A Plan

Dwight D. Eisenhower famously said, “In preparing for battle, I have found that plans are useless, but planning is indispensable.” 

The best way to kill scope creep is to start with a plan. Even though most plans will change as you start digging into a project, it’s still worth having a written plan so you know what the end goal is.

Before a single screw is driven, a hammer is swung, or a paint scraper wielded, figure out what you want to do with your project and how much you’re willing to spend.

Rule 6) Add 15 To 20 Percent To Your Budget Estimates 

Whether you’re hiring someone to do the work for you or you’re doing it yourself, always add 15-20 percent on top of your estimate.

It’s optimistic to think your project estimate will be bang on. In most cases, scope creep will rear its ugly head and you’ll end up paying slightly more than you were quoted.

Rule 7) Prioritize Projects From Must-Do To Nice-To-Have 

Not all projects are created equal. You might hate the color of your kitchen walls, but that leaky ceiling in the family room takes priority. Same with the cracked foundation or the weathered roof.

It’s not always the “fun” projects you get to tackle first. Sometimes you have to wade through some not-so-fun projects before you get to the ones you’re excited about. It’s best for your budget to spread these projects out and tackle the most urgent ones first while you save for the less urgent.

Finally, if you bite off more than you can chew with a project, don’t be afraid to hit pause. Stop the project dead in its tracks and give yourself time to research the best solution to deal with whatever issue has come up.

You may feel pressure from a contractor or spouse that a project isn’t moving along but you’ll save yourself unnecessary expenses by taking your time and finding the best next step.

While the coronavirus pandemic has been an unwelcome surprise in 2020 both with our nation’s health and finances, it’s also given a lot of homeowners time to tackle projects they might have been putting off for a while. Stick to these seven rules and your renovations will stay within budget.

To a richer life,

The Rich Life Roadmap Team

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