There are many good reasons to spend money to add upgrades to a home. But there are also times when it pays to put the brakes on luxury home improvements. Knowing the difference can not only save you money, but it might save you the heartache of losing hard-earned cash or, in a worst case scenario, losing your home.
It all depends on your reasons for renovation.
Here are some things to consider before you tackle any renovation project:
- Think about the finished product: A complete kitchen renovation, for instance, might take up to three months or even longer. Just how long can you live without a home-cooked meal? Think about approaching the job in stages, or at least discuss the timeline -- and the disruption -- in detail before the work begins. Also, be aware that a complete kitchen remodel can run to tens of thousands of dollars, so it pays to plan carefully, or to start small.
- Formulate a budget: Whether you pay cash or finance your remodel, don't dip into funds that you need for normal living or deplete your emergency savings. Separate your needs from your wants, and attach dollar figures to every item -- it's a game of give and take. Consider a remodel plan that has three or more stages: Stretching out the timeline will also allow for more flexibility, and may help you hone your choices.
- Consider the whole: Look to the future whenever you plan a home renovation. Know that trends wax and wane, but that quality is always in style. Classic design is always appropriate, no matter what your home's architecture or locale. If you have doubts about how to plan a remodel that will be in keeping with the rest of your home, be it in the Atlantic Highlands or elsewhere, seek professional design advice, and insist on quality, no matter what your budget.
Routine maintenance and minor repairs should be on your to-do list if you're planning to sell, no matter what your reasons for wanting to move. However, if you're selling because you need the cash equity from your home, it probably doesn't make sense to spend big bucks on updates you will never enjoy, and that won't add extra dollars to the sales price.
If you have just moved into a new home, and want to get on with the business of making it your dream house, it can also be tempting to try to do everything at once. But "over-improving" or creating a large debt burden for yourself are unwise choices that can lead to financial despair.
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