Budget or Bust

Jul 27, 2016

You’re selling your house and downsizing…or, upsizing. Either way, you’ve found the newest home of your dreams. Except that it will require a bit of…updating as they say.

As you wander through the new house, you’re making lists of carpets, cabinets and carports that will have to undergo some renovation.

Unless you’ve got more money than the Republican presidential nominee, you’d better do some serious planning before one thread of that ugly shag carpet gets ripped up.

Steven Covey reminds us that all things are created twice – once in the mind, and then in reality. And the better job we do of creating the thing we want in our mind, the better chance we have of actually getting it.

Here’s how I would approach a major remodeling project:

1. Start at the bottom line. Once this whole project is done, how much are you willing to have spent? If you cannot identify that number, you are not ready to begin this process. That is unless, of course, you don’t care.

2. Divide the cost. How much are you willing to spend on each piece of this project? If you spend your whole wad on painting the outside of the house, will you have enough to do all the fancy things you want to do in the kitchen? The master bath? The man cave?

3. Divide the time. One of the things you fear about budgeting (i.e., planning ahead) is that you might encounter the truth – the truth that you don’t have enough money to do everything you want to do…now. What most folks do at this point is trot down to the bank and take out a loan to finance their dreams. While borrowing money to buy a home can sometimes be a very wise thing, being forced to do so in the middle of a home improvement project is rarely one of those times.

You may have to break your home improvement dreams into pieces you can afford over time. It’s called pay-as-you-go. Delayed gratification. What a concept!

4. Anticipate and accept no excuses. By far the biggest reason for huge cost overruns in home improvement projects are impulse decisions.

To avoid this trap, budget for some of these unanticipated “change orders.” But once you’ve spent that portion of your budget, you’re done. No excuses. No whining.

The more time you take with the first creation (a.k.a., a budget), the more you can enjoy the second…the one you get to live in.