Homeowners love putting money back into their properties. The only problem is that home improvement projects can take on lives of their own. In no time, you could wind up with lots of bills and only a little of what you actually wanted and needed. That’s why it’s essential to put a little thought behind all those fixer-upper jobs you’ve planned for 2023.
This isn’t to say that you can’t achieve your “dream home” goals. Just remember to keep yourself in check. As Angi research notes, the average homeowner spent $8,484 on sprucing up in 2022. True, most homeowners spread that money across 3-4 projects. Nevertheless, $8,400+ isn’t exactly peanuts. You’ll want to make sure you spend wisely.
To help you on your way to home improvement bliss — not bankruptcy — try the following strategies. They’re designed to ensure that your remodeling doesn’t go beyond your means and become a financial burden.
1. Set and maintain a strict budget.
Newsflash: Budgets work. “Current You” might not like the idea of setting up a budget, but “Future You” will appreciate the wisdom.
To start the process, make sure you set aside all the dollars you need for your other annual bills first. Don’t forget to include both your savings and emergency funds. Anything left over is fair game for bettering your home and making it more livable, likable, and perhaps lounge-able.
Going through all these motions alone or with your spouse, partner, or housemate has several benefits. First, it sets you up to avoid creeping credit card debt. CNBC reporting says most Americans have more than $6,000 on credit cards. Your home improvement shouldn’t add to your debt load.
Secondly, budgeting forces you to make responsible adult choices. Do you get the super-deluxe, ultra-expensive smart refrigerator or the regular model? Your budget will show you which direction makes the most sense. Ultimately, you’ll feel less stressed because you won’t worry that you broke the bank on your home facelift.
2. Engage in DIY whenever possible.
You might not have all the fancy tools and experience as your favorite HGTV stars. No worries. You don’t have to be a genius craftsperson to whip up some DIY magic around your home. As long as you have the time and willingness to learn proper techniques, you can DIY and save a bundle.
This can include big equipment and appliance installations, like DIY ductless mini splits. HVACDirect.com explains that with new technology, homeowners now are able to purchase DIY-rated mini splits that can heat and cool multiple rooms. That makes them a solid alternative for additions, retrofits for older homes, and converting garages or barns into living or work spaces.
With average installation costs ranging from $1,500 – $3,500, you’re saving big by doing it yourself. Plus, you can do it on your timetable without having to wait on a pro to schedule you. DIY models are built for installation without any special tools, HVAC experience, or major remodeling. They only require a small 3-inch hole to be cut in outside walls. Once you have an electrician handle the wiring, these mini splits are a complete DIY project and a major time and money saver.
Of course, mini-splits are far from being the only types of DIY projects on the market. Others can include anything from bathroom remodels to extensive landscaping. Just go slowly. Rushing through a DIY job is a surefire way to make mistakes. Instead, keep a steady pace to ensure a fantastic outcome.
3. Pick projects known to raise homeowners’ equity.
When it comes to deciding which home improvement project to focus on in 2023, keep an eye on building equity. The more equity you have in your home, the better. Who knows when you might want to take out a home equity line of credit? The greater your equity, the greater the credit you can access.
Let’s say you’re trying to choose between upgrading your bathroom or refinishing your oak floors. According to Money.com, the former would net you a 71% home value increase. In contrast, the latter would bring a hefty 147% return on investment. Clearly, the floors would win if you were trying to raise the equity you have in your property.
This doesn’t mean that you can’t splurge on pet projects. You need to be realistic, though, especially if you plan on moving in the next few years. Unless you’re going to be living in your current home for 10+ years, you’ll be selling it at some point. When you put up that “for sale” sign, you want to get top-dollar bids. The easiest way to position yourself to relocate with more dollars is to be selective with your home improvement decisions.
4. Tackle what’s been costing you money (before anything else).
You’ve been envisioning how great it would be to put in a high-tech home entertainment system. While you might enjoy all those toys and cinema-worthy sound, take a step back. Is there anything more pressing that’s eating up your dough every month? If so, that’s what you need to address in 2023 first.
What type of nagging “stuff” deserves your attention before that home gym complete with a Peloton and fitness mirror? The list is practically inexhaustible: Leaking toilets, energy-inefficient windows and doors, etc. Basically, if something forces you to pay more out-of-pocket every month than you should, it should be a priority.
As you’ll see, these to-dos won’t be much fun. Nevertheless, you’ll be glad that you put your must-do over your nice-to-do list. Cheapism suggests a family of four could save around $70 yearly just by changing a single showerhead. Nothing is worse than receiving ridiculously high utility bills. Getting an installer to replace your aging windows might not be exciting, but it’s practical.
You might think that your house is good to go. Before you make that assumption, take a look at it up and down, and inside and outside. Are there places where moisture (and mold) could gather? Is there a drippy faucet in the laundry sink? Is the screen on your patio door tattered and torn? Address these problems immediately. Then, put any of your budgeted money that’s left over into more “impractical” improvements.
5. Choose solutions with tax benefits.
Every homeowner would love to save a little during tax season. Unfortunately, most home improvement projects won’t help you with taxes. However, a few of them will give you at least a little break in the form of a rebate or other benefit.
Case in point: Until 2034, you can take advantage of the Residential Clean Energy Property Credit. This credit offers a 30% credit against a clean energy expenditure. You just need to be a taxpaying homeowner in the United States and make a qualifying purchase. Qualifying clean energy purchases include improvements like the addition of solar panels or geothermal heating systems.
If you’ve been thinking about moving toward tapping into renewables, this could be your year. Study up before you make any moves, and always work with trustworthy manufacturers and installers. What could be better than living a more sustainable lifestyle while also lowering the amount of taxes you owe? It’s a winning combination if you can make it all work.
6. Consider choosing upcycled or recycled materials.
Another way to save mega bucks on home improvements is to pick recycled or upcycled materials. Say you want to redo the flooring in your family room with a hardwood. Many savvy direct-to-consumer startups have begun selling reclaimed wood from old structures such as barns. Reclaimed wood planks help preserve forests and keep usable wood from being discarded. They look amazing and have unique textures, knots, and coloring, too.
You’d be amazed at the places that sell used cupboards, cabinets, and just about anything you need for a redo. Yes, you’ll need to do a little legwork to find what you’re looking for. But that’s part of the adventure. From bookcases to dining room tables, you can give old objects new purposes.
Feel free to get creative. To whet your creativity, check out an Architectural Digest piece from 2022. The article displays repurposed furnishings including a dresser-turned-sink and a simple side table with updated hardware. Remember that you can always sell the items you don’t need to someone who’s also interested in upcycling. You’ll get a few dollars back to save or spend.
7. Put everything on your best credit card.
As the Points Guy would say, a credit card without points has no point. While you shouldn’t set out to max out your credit, use a points-based card for all your home revitalization spending. This includes anything from the littlest paint can to the biggest appliance.
By putting everything on one card, you’ll get a ton of points or other rewards. The result will be that you can do something special later, like take a vacation or splurge on dinner. And you might not have to spend a penny on whatever it is you do.
There’s a secret trick to making this work for you and not against you: Paying off the card right away. Before your statement comes, you should be down to zero on your credit card. Otherwise, you’ll negate all the advantages you’re getting from your credit card strategy.
Whether you have $100 or $10,000 to put toward beautifying your home-sweet-home, start with a plan. Having a roadmap supported by a realistic budget will give you peace of mind — and a more peaceful living space.
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