Home improvements are planned by almost all homeowners when they want to renovate for investment purposes or just to get more out of their homes. But before considering all of your transformation options, you should think about how you’ll spend for your project.
Before going to the bank for a loan, consider spending some for this new adventure.
Saving up for a major or minor renovation is smart for a few obvious – and not so obvious – reasons.
- No interest, closing costs or loan fees. It is obvious that the banking industry makes money when you want to do something for which you don’t have the cash. You don’t need to pay someone else to finance your adventure when you have the cash in hand.
- No diminution in your credit score. Depending on whether you opt for a home equity loan, mortgage refinance, line of credit or unsecured loan, your credit rating may take a hit. Paying in cash for you home improvement project will give you no risk of unpleasant surprises when you check your credit score.
- No debt. Debt can be a useful tool for building credit but not when you max out cards to finance a kitchen renovation. Always be smart of using your credit cards to boost your credit and use your savings account for big purchases.
Ways to Save Up
Once you have decided to save up and pay cash for your project, it’s time to get creative to build that savings. Before you start applying for extra jobs, sit down with your budget and a record of the last six months’ worth of living costs. Finding ways to save isn’t impossible. Try saving up all the change from anything that is purchased.
You can also try saving on household expenditure like heating and cooling. Find other ways to adjust to different temperatures aside from using the heater and the air conditioner. You can also sell unused furniture to add up to your savings.
You can also try some of all of these savvy ways to save at home:
- Turn down your water heater.
- Install a programmable thermostat.
- Haul your weekly trash to the dump instead of paying a private collection company to do it for you.
- Replace air-conditioning filters at least every 4 weeks.
- Use SmartStrip Surge protectors so electronics and appliances don’t use electricity while turned off.
- Switch to LED light bulbs… as in, yesterday.
Once you’ve saved up for the project of your choosing, it is time to keep that cash where it belongs. Choose a very reliable contractor and note some parts of the project you can do by yourself. Also read up n the tax breaks or rebates you may be entitled for having improved your main home.
If your goal is to improve your own living space or enhance your real estate investment by way of home improvements, cash is the least expensive option.