The Smart Way to Budget for Home Improvements While Managing Debt

Let’s be honest: a few hours watching HGTV will give anyone the home improvement bug! A shiny new kitchen or a luscious and landscaped backyard seems easy to attain—right up until you’re forced to fork over hundreds or even thousands of your hard-earned money to pay for it all. If you’re tackling debt simultaneously, home improvement projects can go from exciting to exhausting in a single paycheck.

While many homeowners turn to financing home repairs, establishing a home improvement budget will prevent you from adding to your current debt load. Budgeting in advance for all your home improvement needs (or dreams) allows you to account for the costs you’ll incur and save for them properly. However, just because you have a budget doesn’t mean you’ll automatically save money! To make your budget work for you and manage your debt at the same time, you’ll need to start with a smart foundation. Read on to discover our three best tips for creating a home improvement budget!

One: Figure Out What You Absolutely Have to Get Done

Like we mentioned previously, a few episodes of Fixer Upper or Flip or Flop can leave you itching to break out your safety goggles and ready to go to town on your bathroom tile! But before you grab a sledgehammer, it’s essential to figure out what renovations are necessities and what home improvement projects are just so you can live out your Property Brothers fantasies. 

Start by compiling a list of all the improvements you have to make and those you’d like to make. Think about things that you not only want to have completed in a year but also those projects you intend to do a few years down the line. Then ask yourself, “Does this need to get done right now, or can I wait until I’ve made a more significant dent in my debt?” Installing new cabinets in your kitchen is great, but if you have a more pressing issue like an A/C unit that’s about to give out or leaves that need to be removed from your gutter, then those should be your top priority. Rank your projects from most to least important and give an estimated date when you’d like to have them completed. The longer the timeline you give yourself to save up for projects, the less money you’ll have to put away each month and the more money you’ll have to put towards your debt. 

Two: Find Ways to Save

It’s easy for even the most frugal of homeowners to get sucked in by the excitement of choosing fixtures and finishes then end up blindsided by extra or unexpected costs. If you can find ways to maximize your budget ahead of time, these bumps in the road will feel more like pebbles than potholes and allow you to keep tackling debt.

Look Into Opportunities

Check in with a tax advisor before starting any renovations. Suppose you’re planning on making energy-efficient changes to your home, such as installing solar panels or putting in biomass stoves. In that case, there may be tax breaks in it for you! In some cases, government financing programs can cover most of, if not all, of project costs. As a bonus, these programs usually have more lenient requirements for credit scores and income, so you have a better chance of getting coverage. 

Similarly, contact your homeowner’s insurance before starting on a home improvement. If the project was spurred on by an issue outside of your control, like termites or water damage, you might be able to secure coverage through them.

Settle Your Debt

If you’re planning on renovating sooner rather than later, you should consider debt settlement to help you pay down debt quickly and for less than you originally owed. Not only does this help you cut down on your debt payments, which leaves more money to put towards home improvements, it also means you spend less time dealing with creditors and more time in the aisles of a hardware store!


One of the most significant factors impacting a renovation cost is whether or not an individual is willing to do any of the work themselves if it’s appropriate. If you’re not afraid to roll up your sleeves and get your hands dirty, consider DIYing! Even something as small as painting a room yourself or installing new faucets will leave more money to put towards your home improvement budget or your debt. There are plenty of resources out there to help you tackle home improvement projects. We recommend watching tutorials on YouTube, reaching out to family and friends, and checking out home improvement podcasts and blogs before you touch a paintbrush or screwdriver for some great tips and tricks. 

Get Multiple Quotes

While you may have a good handle on how much you can comfortably put towards a project, you won’t be able to get the big budgeting picture until you get quotes from contractors. Reaching out to multiple vendors gives you options, meaning you’re more likely to end up with a fair price. If you do end up going the contractor route, remember that they are usually the least busy during the winter and generally offer you better rates during this time than they would during peak season.

Three: Do Your Research, But Allow for Some Wiggle Room

Figuring out exactly how much to spend on a home renovation can be tricky. Still, a little bit of research can go a long way in helping you settle on the right budget for your financial situation. Use tools such as HomeAdvisor’s True Cost Guide and the 2020 Remodeling Cost vs. Value Report to get estimates of how much your project should cost. Both of these allow you to compare costs by zip code, so you’ll get a better sense of how much you should be spending based on your area.

However, you shouldn’t base your budget solely on your estimation. Be sure to add a bit of wiggle room—roughly 10%-15% of your estimated budget—to account for unexpected costs. 

Though taking on home improvements while managing debt can be difficult, it doesn’t need to be impossible! Following our three tips for smart budgeting will set you up for success in more ways than one. 

To learn more about how ACCS’s program can help you manage your debt while you tackle a home renovation, reach out to our team of professional debt specialists. Request a Custom Debt Relief Plan or call 877-820-2954 to learn more about our program today!

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