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Everyone desires to have their dream home. Whether it is a grand entrance with a chandelier or an all-white kitchen, you can dream it all but what if you want it to become reality.
Where would you start? It’s hard enough to dream it but to make your dream house come true can be challenging.
Especially how expensive it could be to renovate your home on a budget. Though Dave Ramsey may have some good ideas on how to budget for home improvement.
What Dave Ramsey Says About Home Improvement
Dave Ramsey has a lot to say about home buying. He may not talk as much about home improvements, but let’s dive in. Starting home improvements may have been on your mind for a while.
Though you may be asking yourself if it’s the right time to do so. Dave Ramsey suggests you should be financially stable or at least consistent on your budget if you are still paying off debts.
It could also depend on what type of financial situation you are in. If you still owe the debt and are paying off your loans, it’s probably best to wait a while.
This may be annoying if you want to start adding home improvements, but it will be more beneficial for you to wait than spend more money on something you may not be able to afford.
If you want to add home improvements, it is a good idea to start having a budget and create a saving plan for home improvement.
Therefore, in the future when you finally plan on working on those projects you can use those savings for the home improvement and not take your money out of your pocket.
Why Home Improvements Can Lead You to Bankruptcy
Many people may start thinking about taking out a second mortgage to purchase home improvements.
You can understand what Dave Ramsey thinks about bankruptcy, and how it is a last resort.
The challenge can be that the individual stretches their budget and does not account for financial hardship and bankruptcy.
It’s quite surprising that many may not understand the additional monthly expenses from taking out loans or a second mortgage which lead them to take a bankruptcy calculator and file bankruptcy.
Know-How Much Improvements Cost
Before you start spending away on your home improvement, it’s a good idea to understand how much it will cost.
To understand this, you have to figure out what type of home improvement project it will be.
The home improvement cost could depend on where you live, which room, and how much square foot you will be renovating.
This could mean you would possibly spend from $100 to a $2,000 home improvement project.
That is why it is always better to plan ahead of time so that way there are no surprises in the long run.
Also, consider whether the home improvements you are considering may be covered by homeowners insurance.
A great way Dave Ramsey suggests helping plan out your home improvement project is by listing out all the home improvements you want to do.
Then from there get an estimate for each of the projects to understand how much each will cost and what the total will be for everything.
This will help you keep track of all the projects you hope to do and so you don’t get confused with the cost later in the future.
What Dave Ramsey Says About Budgeting
Budgeting should be on everyone’s mind when you plan on making home improvements. It is something that Dave Ramsey preaches a lot.
In fact, in Dave Ramsey’s baby steps, budgeting is needed to complete the steps if you want financial wealth and stability.
That is why budgeting will come in handy with your plan on making home improvements because you won’t need to worry about overspending on a project that may cause financial struggle later.
So, to have a budget for your home improvements there are 3 steps that you can take to help guide you through the process.
A great step in the right direction is to prioritize first which project you want to work on.
Such as which project will help raise the home value and of course which one you want to be done.
Next, you want to check the amount of money it will cost to renovate your home. Once you have that all set up, get in contact with contractors for those specific projects.
Usually, it’s good to talk to about 3 different contractors to find the best estimate for your home improvement.
Having a budget will give you a bit of peace of mind when you decide to work on your home improvements.
Should You Get Out of Debt First Before Home Improvement?
Paying for home improvements will add up depending on how large those projects are.
So, if you are still in debt, you should consider focusing on paying them off first before home improvement.
The reason why is because you could be using all that money from those projects and using it to pay off your debt.
Being in debt is not all that fun so it’s best to try and pay them off first rather than getting yourself into more debt.
What you should do is continue paying off your debt while also creating savings worth 3-6 months of an emergency fund.
This can be used later when you plan on making your home improvements. Trying to pay for too many things at once can be damaging to your financial state and you may end up in hardship.
Don’t worry though, your plans on home improvement will still be there waiting for you once you have paid off all your debts.
You have a budget, and you understand the costs to avoid bankruptcy and financial hardship.
Once you can finally add home improvements, have fun with it! It is always exciting to create and add something new to your house.
After hours of thinking about all your projects and what you want to do with your home, don’t hesitate to start on them once you are ready for it.
Your dream home is near and should be an amazing experience to see a new transformation.