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Drivers and homeowners

May 18, 2018

How to protect your budget (and your marriage) when renovating your home

Planning ahead for renovations can help ease some of the stress on your finances — and your relationship.

On the list of things you can do to stress both your marriage and your bank account, a home renovation has to be near the top. But there are steps you can take to minimize that stress.

David Halliwell works in digital marketing in Toronto. He and his wife, Joline, recently renovated the main floor of their 1930s-era bungalow. The project came in on time and on budget, but it took “a lot of pain” to get there, says Halliwell. “We were able to stick to our budget because we spent the time to accurately price and think of everything.” The couple avoided arguments and delays by agreeing that Joline would be the go-to with the contractor. “We had a rule,” says Halliwell. “I only said no when I really disliked something.”

Even the healthiest relationship can get a little tense when you’re dealing with a major upheaval in the place that’s supposed to be your safe haven. You have to agree on the scope of the renovation: Are you tearing out the kitchen entirely, or just refacing the cabinets and replacing the counter? You need to overcome differences of opinion over critical details like whether to paint the walls greyish-white or whitish-grey. But what can really ratchet up the stress is when you get thrown an unexpected curveball, like one of these:

  • The only floor tiles you and your partner could agree on have suddenly tripled in price.
  • Your plumber goes to Portugal for two weeks and ends up staying all summer.
  • You find out that your new sunroom is a metre too close to the lot line.

So what can you do to avoid — or at least mitigate — those curveballs?

Make sure you have enough money

Before you sign on any dotted lines, you’ll have to decide how you’re going to finance your reno.

  • Your tax-free savings account (TFSA) is an excellent source of funds. You pay no tax on the money you take out and you can refill your account by the same amount the following year, so you don’t have to delay your longer-term goals (like saving for your retirement) for long. The Halliwells paid for most of their reno with money they had saved in their TFSAs for five years.
  • You could qualify for a home-equity line of credit. Although you could carry a line of credit almost indefinitely by just paying the interest every month, it’s smarter to treat it like a loan. Work out how much you need to put towards it every month to pay off the principal plus interest in a year or two, and be disciplined about repaying it. Lines of credit are vulnerable to rising interest rates, so you’ll want to clear yours off as quickly as you can.
  • If you incorporate environmentally sustainable features into your reno, like high-performance windows or even a charging station for your electric car, you could get financial assistance from the government. The Halliwells got back half the cost of their insulation. If you’re over 65, government money is also available to help offset the cost of making your home accessible, by installing features like a ramp or a wheel-in shower. (See Home accessibility tax credit; CMHC Green Home; Green Ontario Fund.)
  • While your reno is underway, you might feel like your credit card is welded to your hand. Be careful not to charge any more than you can pay off each month, and track all your spending against your budget. Carrying a balance on your credit card is a sure-fire way to blow up your renovation budget.
  • Build in delay time — Halliwell recommends adding one week for every month you expect the job to take — and add up to 25% to your budget to cover unexpected costs. But don’t treat the cushion as a slush fund to dip into at will — keep that money for truly unexpected, unavoidable costs.
  • If home prices continue to rise, you may get back some or all of your project costs when you sell, depending on what you renovated. (Kitchen and bathroom renos tend to be good investments, the experts say.) But don’t count on it: Home prices may stall or even fall, or your home may end up too far out of sync with other homes in your neighbourhood for the sale price to compensate for your costs. It’s better to renovate so you can enjoy your home more, rather than just to increase its value.

How to save money on your renovation

Now that you have your money set aside, here’s how you can get the most from it:

  • Take advantage of free, expert advice. The Halliwells brought in a realtor to recommend popular and useful features to include in their reno.
  • Set your priorities. Decide where you’re willing to economize, and where you require the best (or at least, the better). You’ll probably want the best windows you can afford, for example, but you could likely do without custom drawer pulls. Brian Tell of Mississauga, Ontario has been a general contractor and finish carpenter for nearly 30 years. He advises: “Don’t practise false economy. If you want something to last, spend more. But don’t insist on high-end items if something less expensive will do the job just as well. Decide if what you’re asking for is a need or a want.”
  • Resist Pinterest. Once work has begun, alterations can get pricey, so stick to your plan as much as you can. Pinterest can be very helpful when you’re looking for ideas, but as soon as you’ve decided what you’re doing, shut it off or you’ll be inundated with images for months and be tempted to second-guess yourself and make expensive changes to your plan. Tell says clients tend to go over budget by changing their minds part-way through a project, so things have to be ripped out and redone.
  • Give back and save. Look into buying new or gently used building materials (e.g., interior doors) from Habitat for Humanity’s ReStore. If you’re redoing your kitchen, you might even be able to arrange with the ReStore to take apart and take away your old kitchen, free of charge.

Protect your investment

Being careful with your money is vital for a successful home renovation — but so is taking care that all the legal and safety issues are covered:

  • Hire reputable, licensed professionals. While you should leave jobs like wiring and plumbing to the experts, if you’re reasonably handy and energetic, you could do the painting, tiling or wallpapering yourself. But the pros do it faster and better — and any errors they make can be easily flagged for fixing, rather than setting off a marital meltdown. “Make sure you have a written contract that clearly lays out what will be done for the agreed-on cost,” says Tell. “Ask your contractor to put in writing the terms of whatever guarantees are offered, and make sure you read the contract carefully, and both you and the contractor sign off.”
  • Get permission. Check that your contractor has obtained all the required permits before beginning and that the work passes all municipal inspections.
  • Make sure you’re covered. Construction sites are prime locations for fire. Be sure your contractor and subcontractors carry adequate liability insurance and workers’ compensation coverage, and that they clean and tidy the worksite every night. Check with your home insurer to see whether you need additional protection during construction or upon completion.

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