How to Easily Budget for Your Home Renovation

There is no standard budget for a home renovation as each one is extremely different based on the type of home, location, and extent of work. The average home renovation project costs $52,236, according to Angi, a home care website. 

Before you dive into a home renovation project, it's a smart move to first get clear on your “why.” Are you looking to fix safety issues, cut energy bills, make updates for comfort, or renovate to raise the value of your home? Knowing your purpose will help guide every decision.

Here's a simple checklist to get you started:

• Write down what you want most from this project.

• Separate must-haves (non-negotiables) from nice-to-haves.

• Compare contractor estimates and DIY supply costs.

• Add a 15-20% cushion for permits, price changes, or surprise costs. 

Taking these steps up front gives you a realistic plan that keeps your renovation budget-friendly and avoids surprises down the road.

Every home renovation wish list should have two parts: the essentials and the extras.

• Needs are the must-haves that keep your home safe and functional, like fixing a leaky roof, updating wiring, or replacing broken appliances.

• Wants are upgrades that are nice to have but not urgent, like custom cabinets, new flooring, or luxury finishes.

Understanding this difference early keeps your project focused, prevents overspending, and makes sure your money goes toward what matters most.

Once you know your goals, it’s time to see what they’ll really cost. Start by using a home renovation calculator tool. Then, get estimates from multiple contractors to get a sense of what you should expect to spend to get the outcome you desire.

If you’re considering a DIY project, be sure to compare prices on supplies at different home improvement stores to see where you can realistically save money.

Here are a few quick wins for budget-friendly DIY projects:

• Paint walls or cabinets for a dramatic refresh.

• Swap out cabinet handles, faucets, or light fixtures.

• Add peel-and-stick backsplash tiles in kitchens or bathrooms.

• Refresh landscaping with mulch and low-maintenance plants.

Whichever route you take, build in a 15-20% cushion so surprise costs don’t derail your budget.

One of the fastest ways a renovation goes over budget is by overlooking hidden costs like permits, inspections, or labor.

DIY home renovations can also backfire. One mistake with the plumbing or electrical work can cost even more to fix than hiring a pro from the start.

So, before you commit, it's wise to look at the full picture. Think of your home renovation budget as a financial before and after. In other words, don't just imagine how your home will look once the improvements are complete. You should also consider how your bank account will look.

Planning for the real cost helps you avoid debt so you can truly enjoy the results.

Pro tip: If you’re completing any structural work, consider that your insurance premium may change. Even if it’s cosmetic work, it’s always a good idea to shop around for your homeowners' insurance to see if you score a lower premium. Use Insurify to shop for your insurance around to see if you can save.

Did you know you may not have to shoulder renovation costs alone? There are government programs and WorkMoney partner services that can put real money back in your pocket.

These are resources you’ve already earned—not handouts. 

Tap into Government Programs

• HOMES Rebates: Federal funds for energy-efficient upgrades that cut utility bills.

• HEEHRA Rebates: Help cover heat pumps, electrical panel upgrades, and insulation.

Take Advantage of Extra Savings

• Ownwell: Protest your property tax assessment to lower annual bills and free up cash for upgrades.

• Insurify: Compare home insurance rates to avoid overpaying—extra savings that you can put toward your project.

• Habitat ReStore: Access discounted building materials and strengthen your financial footing to stretch your renovation dollars further.

• TrustPlus: Offers free one on one coaching to help you budget and save for your goals.

Of course, not every project calls for a professional. But not everything is worth trying on your own, either. Let's take a look at some pros and cons of each method.

Tips for finding reliable, affordable contractors:

• Get at least three bids.

• Check references and reviews.

• Has a license and insurance.

• Watch for red flags like vague contracts or demands for upfront payment.

• Get everything in writing, including timelines and payment schedules.

If your budget is limited, consider putting your money toward the projects that give you the biggest bang for your buck. These can include the following:

• Kitchens and bathrooms usually deliver the most value when it comes time to sell.

• Energy-efficient upgrades like insulation, new windows, or better appliances can lower your utility bills month after month.

• Simple updates like painting, swapping hardware, or freshening up landscaping can also make a noticeable difference without costing much.

By tackling high-value projects first, you’re not just improving your home—you’re making smart financial moves that stretch your renovation dollars further.