Budgeting
The price for a new kitchen or bathroom will be affected by (1) where you buy it (2) what features it includes and (3) the brands/models you select.
For kitchens, pricing can range from $5,000 or so (if you do some work yourself) to as much as $150,000 and higher. On average, a kitchen will cost from $15,000 - $26,000, including design, products and installation.
Cabinets can account for about half or more of the total cost of a simple kitchen remodeling project and will have the greatest impact on your budget. They range in price considerably based on quality, the type of material they are made of, and whether they are stock (ready made in specific sizes) or custom (produced specifically for your kitchen in whatever sizes are needed).The material you choose for surfaces including counters, backsplashes and floors can also account for variations in price.
Other key elements that factor in to the equation are talent and workmanship. In the remodeling business, you tend to get what you pay for. An accomplished designer, skilled sub-tradesmen and expert installation crew may cost more. But you'll appreciate their ability every time you use your kitchen.
Consider these factors for larger kitchen remodeling projects.
More common are the smaller remodeling projects dealing only with replacing cabinets, countertops and some appliances with budgets and time lines significantly smaller & shorter.
1. Decide how much you want to spend, and stick to it.
Setting
a budget for your kitchen remodel and staying within it sounds so
obvious and simple, but it’s harder than you think.
The average cost of an upscale kitchen remodel can be more than $80,000, but three factors should determine whether you want to spend that much. The first is how much you can afford to spend. Take a look at your finances to determine this number.
The second is how long you plan to stay in your house. If you are planning on selling the home within five years, then your kitchen renovation should be viewed as an improvement on a real estate investment. Only spend what you think you will get back when you sell the house. If you plan on living in your home longer than five years, you should do a remodel that will make you and your family the most comfortable.
The third factor is your neighborhood. Is it modest, or upscale? If you put a ruling class kitchen in a middle-class neighborhood, you’ll lose money on your investment when you sell your house. Don’t over-improve.
2. Know how the costs will
break down.
Labor will consume anywhere from 20 to 35
percent of your project costs. Cabinets can also devour a big chunk of
your kitchen remodel budget.
Here’s how it breaks down, on average:
35 percent: cabinets
20 percent: labor
20 percent:
appliances
10 percent windows
5 percent: fixtures
3 percent:
fittings
7 percent: other
3. Set aside 20 percent of
your budget to handle the unexpected.
You’re going to
encounter surprises in your kitchen remodel, especially in an older
residence. There are all sorts of budget-busting surprises possibly lurking
behind the walls or under the floor. Like when you rip out your walls
and discover your electrical wiring is out of date. Or you pull out your
dishwasher and discover the floor beneath it is rotten thanks to a
water leak you didn’t know about. Leave some wiggle room in your budget
to cover these surprises.
4. Make a list of your
renovation priorities.
What’s most important to you? New
appliances? New cabinets? Write down your priorities so if unexpected
costs hit your budget, you’ll still get the top things on your list
done.
When setting your priorities, think about how important the little goodies like crown molding and a super-deluxe faucet are to the overall look and function of the kitchen. The little things add up. There may be a cost-saving alternative, or you may be able to do without the item entirely.
5. Know the details of how you will
pay for this project.
There are many ways to pay for a
kitchen remodel. Some save for it, but home equity loans are the most popular because
they’re tax deductible. Other options include refinancing, taking out a
personal loan or taking a loan against a retirement plan.
Even if you have cash in hand, borrowing money at a low interest rate may be smarter than pulling your money from an investment account getting a higher return. Get those miles some credit cards offer!
If you’re getting a loan, factor in costs like interest and loan origination fees. Also, find out when you’ll get the funding from your loan. You’ll need to make deposits and progress payments with your contractors, and you’ll need to pay for materials up front.
6. Decide whether you’re going to stay in your home while
renovations are taking place.
Living someplace else while
the work is being done is a good idea and will lessen your stress, but isn't totally necessary. We take care to bag off the area under construction, but if you do decide to stay elsewhere, take
into account the cost of an apartment or hotel, storage fees and moving
fees.
If you stay, there will be a cost to your sanity. Most families set up a temporary kitchen in an adjacent room, and you should add in the cost of doing this.
7. Factor in the cost of eating
out.
Face it, you will be eating a lot of meals in
restaurants or bringing home take-out food while your kitchen is torn
up. Fit this expense into your budget at the outset.
8.
Create a spreadsheet for your budget and check it often.
Put
your budget and how much you’re actually spending on spreadsheets so
you can keep tabs on how much you are actually spending. If you see a
cost overrun starting to happen, you can stop it.
9. Do
some of the small work to lower your costs.
You don’t have
to pay someone else to do all the work. Demolition – taking out the old
cabinets, appliances and flooring, and painting, for instance.
10.
Avoid extras. Don’t be tempted to deviate from your budget mid-project.
If
you catch yourself saying “It would be so great if we added (fabulous
kitchen feature here),” stop yourself. This is how budgets get blown. Go
look at that remodeling budget you made in step 1, and repeat the
number like a mantra. You can live without the little extras.