How to Budget for a Home Remodel

Remodeling your home is exciting, but without a solid budget, costs can quickly spiral out of control. Whether you're updating a kitchen, bathroom, or entire home, careful planning ensures you stay within your financial limits while achieving your vision.

So, how much does a home remodel cost? What should you prioritize? And what financing options are available? At Salisbury & Landolt Construction Group, we help homeowners in Lincoln, NE, maximize their remodeling budgets without sacrificing quality.

In this guide, we’ll walk you through:
✔️ Setting clear remodeling goals
✔️ Estimating costs and avoiding overspending
✔️ Financing options to fund your renovation
✔️ Preventing hidden costs

A well-planned budget leads to a stress-free remodel. Let’s dive in!

📞 Need a professional quote? Contact Salisbury & Landolt Construction Group for a free consultation!

1. Define Your Remodeling Goals

Before setting your budget, clarify your remodeling goals. Without a clear plan, costs can skyrocket, and you may end up with unnecessary upgrades..

Identify Your Priorities

Ask yourself: Why are you remodeling?
✔️ Increase Home Value – Focus on high-ROI renovations like kitchen and bathroom remodels.
✔️ Improve Functionality – Need more space? Consider home additions or basement finishing.
✔️ Upgrade Outdated Features – Modernize old plumbing, flooring, or lighting.

💡 Tip: A minor kitchen remodel has an 81% return on investment—one of the best upgrades for resale.

Decide on Full Remodel vs. Partial Upgrades

🔹 Full Remodel – High cost but transforms your home. Best if tackling multiple outdated areas.
🔹 Room-Specific Renovation – Budget-friendly. Kitchen and bathroom upgrades provide the best value.
🔹 Phased Remodeling – Spreads costs over time. Ideal for homeowners with limited upfront funds.

DIY vs. Hiring Professionals

✔️ DIY: Painting, flooring, simple cosmetic updates.
✔️ Hire a Pro: Electrical, plumbing, structural work (mistakes here can be costly and dangerous).

A clear plan helps you allocate your budget wisely and avoid costly mistakes.

2. Research Costs and Create a Baseline Budget

Knowing how much your remodel will cost is essential to prevent overspending. Prices vary based on materials, labor, permits, and unexpected expenses, so research and planning are key.

Breaking Down Home Remodeling Costs

A well-planned budget includes all potential expenses. Here’s a general breakdown of where your money will go:

💰 Materials (40-50%) – Flooring, cabinets, countertops, appliances, plumbing fixtures, paint, and other building materials.

🛠 Labor (30-40%) – Hiring licensed contractors, electricians, plumbers, and carpenters.

📋 Permits & Inspections (5-10%) – Required for structural work, electrical updates, and major renovations.

🚧 Unexpected Expenses (10-20%) – Hidden damage, code updates, or mid-project design changes. Always budget for unexpected costs to avoid surprises.

Average Remodeling Costs

Remodeling costs vary by project type. Below are average cost estimates for popular home renovations:

🏡 Kitchen Remodel – $25,000 to $75,000
🛁 Bathroom Renovation – $10,000 to $30,000
🏠 Full-Home Remodel – $100,000+
🔨 Basement Finishing – $20,000 to $50,000
🏗 Home Addition – $50,000 to $150,000

Want a detailed cost estimate for your specific project? Check out HomeAdvisor’s Cost Guide to compare costs in your area.

How to Get Accurate Cost Estimates

✔️ Request multiple quotes from licensed contractors.
✔️ Use online cost calculators to compare estimates.
✔️ Track all expenses in a spreadsheet to stay on budget.

A realistic budget ensures your remodel stays on track and stress-free.

3. Prioritize Your Spending: Where to Save and Where to Splurge

Not all upgrades are equal—some add value, while others are just nice-to-haves. Prioritizing where to spend vs. save will keep your remodel within budget.

What’s Essential vs. Optional?

✔️ Must-Haves: Fixing structural issues, updating outdated wiring or plumbing, replacing damaged flooring, and improving energy efficiency.
✔️ Nice-to-Haves: High-end finishes, luxury fixtures, custom cabinetry, smart home tech, and outdoor landscaping.

💡 Tip: Energy-efficient upgrades like new windows or insulation reduce utility costs and may qualify for tax credits.

Where to Get the Best ROI

🏡 Kitchen Remodel (60-80% ROI) – Upgrading appliances, cabinets, and countertops boosts home value.
🚿 Bathroom Renovation (60-70% ROI) – Modern fixtures and improved layouts make a big impact.
🪟 Energy-Efficient Upgrades (70-80% ROI) – Lower energy bills and increase resale value.

Should You Remodel in Phases?

If your budget is tight, remodel in phases to spread costs over time:
📌 Phase 1: Structural repairs and essential upgrades.
📌 Phase 2: Kitchen or bathroom renovations (high ROI projects).
📌 Phase 3: Energy-efficient improvements (windows, HVAC).
📌 Phase 4: Aesthetic upgrades and luxury features.

Prioritizing essential renovations first ensures your budget is spent wisely.

Section 4: Understand Financing Options

Remodeling isn’t cheap, and if you don’t have the full amount saved, financing can help fund your project. The right option depends on your budget, credit, and long-term goals.

Best Ways to Finance a Home Remodel

🏦 Savings (Best for Small Projects) – No interest, no debt, but requires upfront cash.
🏡 Home Equity Loan (Best for Large Remodels) – Lump sum, fixed rates, and potential tax benefits. (Source)
💳 HELOC (Best for Flexible Spending) – Borrow as needed, lower rates, but variable interest.
💰 Personal Loan (Best for Mid-Size Remodels) – No home equity required, quick approval, but higher rates.
⚡ Credit Cards (Best for Minor Upgrades) – Can work for short-term expenses, but high interest.
🏠 Government-Backed Loans (FHA 203(k), VA Loans, EEMs) – Great for energy-efficient and structural renovations.

💡 Tip: Compare interest rates and repayment terms before choosing a loan.

A smart financing plan ensures your remodel stays affordable and stress-free.

Section 5: Plan for Hidden Costs and Surprises

Even the best-planned remodels come with unexpected expenses. Without a cushion in your budget, hidden costs can derail your project.

Common Hidden Costs

🚧 Structural Issues – Old wiring, plumbing, or foundation problems can add thousands to your costs.
📜 Permit & Code Updates – Some renovations require permits, and outdated systems may need upgrades.
🔨 Material & Labor Changes – Supply chain issues and labor shortages can cause price hikes.
🏚 Mold & Water Damage – Unforeseen damage behind walls or under floors must be fixed before continuing.

How to Budget for Surprises

✔️ Set Aside 10-20% – Always include a contingency fund in your budget.
✔️ Get a Detailed Estimate – Work with a trusted contractor to identify potential hidden costs upfront.
✔️ Avoid Mid-Project Changes – Last-minute upgrades increase costs quickly.

💡 Tip: Home inspections before remodeling can help uncover hidden issues early.

Preparing for unexpected expenses ensures you stay on track and within budget.

Section 6: Get Quotes and Hire Contractors

Hiring the right contractor is crucial to keeping your remodel on budget and on schedule. A bad hire can lead to delays, overspending, and poor-quality work.

How to Get the Best Quotes

✔️ Get at Least 3 Bids – Compare pricing, timelines, and included services.
✔️ Check Reviews & References – Look at past work, testimonials, and online ratings.
✔️ Verify Licensing & Insurance – Always work with a licensed, insured, and bonded contractor.
✔️ Understand the Contract – Ensure all costs, materials, timelines, and warranties are in writing.

💡 Tip: Be cautious of bids that are too low—they often lead to hidden fees or poor workmanship.

Red Flags to Watch Out For

⚠️ No written contract – Always get a detailed agreement.
⚠️ High upfront payments – Avoid paying more than 10-20% upfront.
⚠️ Unclear pricing – If a contractor isn’t transparent about costs, walk away.

Finding the right contractor ensures your remodel is done right, on time, and within budget.

Section 7: Budgeting for DIY vs. Professional Work

Should you DIY parts of your remodel to save money, or is hiring a professional the smarter choice? The answer depends on your skills, project complexity, and risk tolerance.

What You Can DIY (To Save Money)

✔️ Painting & Wallpapering – Easy to learn and cost-effective.
✔️ Installing Flooring – Laminate or vinyl plank flooring can be DIY-friendly.
✔️ Cabinet Refinishing – Instead of replacing, repaint or reface for a fresh look.
✔️ Basic Demolition – Removing old fixtures, cabinets, or drywall (safely).

When to Hire a Professional

⚠️ Electrical & Plumbing – Mistakes can be dangerous and costly to fix.
⚠️ Structural Changes – Moving walls requires expert assessment.
⚠️ HVAC & Roofing – Complex systems require proper installation.
⚠️ Permitted Work – Some renovations require licensed professionals by law.

💡 Tip: Hiring a pro for critical work prevents costly mistakes and ensures code compliance.

A mix of DIY and professional work can help stretch your budget while ensuring quality results.

Section 8: Track Expenses and Stay on Budget

A well-planned budget can still go off track without proper expense tracking. Keeping an eye on spending vs. estimates ensures your remodel stays within budget.

How to Track Remodeling Costs

✔️ Use a Spreadsheet or Budgeting App – Track all expenses, including materials, labor, and permits.
✔️ Review Costs Weekly – Compare actual spending against your initial budget.
✔️ Avoid Unnecessary Upgrades – Mid-project changes can skyrocket costs.
✔️ Negotiate When Possible – Some contractors and suppliers offer discounts for bulk purchases.

What to Do If You’re Over Budget

🚨 Reassess Priorities – Cut non-essential upgrades.
🚨 Find Cost-Saving Alternatives – Choose budget-friendly materials or phased remodeling.
🚨 Consult Your Contractor – A good contractor can adjust plans to fit your budget.

Consistently monitoring expenses keeps your project affordable and stress-free.

Conclusion: Stay on Budget for a Successful Remodel

A home remodel is an exciting investment, but without a clear budget, costs can spiral fast. By following these steps—defining goals, estimating costs, prioritizing spending, securing financing, planning for surprises, hiring the right contractors, and tracking expenses—you can keep your project on track and stress-free.

🔹 Set clear remodeling priorities before you start.
🔹 Research costs and get multiple quotes to avoid surprises.
🔹 Choose smart financing options that fit your budget.
🔹 Plan for hidden expenses to prevent overspending.
🔹 Track your budget closely to stay in control.

💡 Tip: A well-planned remodel doesn’t just enhance your home’s value—it ensures you get the best results within your budget.

📞 Ready to start your remodel? Contact Salisbury & Landolt Construction Group for a free consultation and expert project estimate!