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We’ve all heard the nightmare stories about a renovation budget that has blown out by tens of thousands of dollars due to inadequate financial management and planning. No matter the size of your project, it is always smart to monitor the growing costs of your renovation rather than to wait until the end for a drum-rolling “grand total” — it will undoubtedly be grander than you ever imagined.

The truth is, while all home improvement projects start with the best of intentions, things can go wrong quickly if you are not careful with your finances. To protect your renovation from becoming another horror story, check out these simple tips to keeping on top of your finances when looking to renovate.

Budget

Before you start swinging the sledgehammer, create a financial budget. Factor in every possible expense you can think of, including the unavoidable costs such as council fees and the preparation of preliminary plans. Allow at least $2,000 for this. In addition, consider builder’s fees and materials, architect’s fees, storage fees and bank fees for taking out a personal loan or extending your mortgage. Be wary of overcapitalising, especially if the idea is to add profit to your home at sale. (more…)