So you’ve made the big decision to renovate your space. Have you set a budget yet? If you’ve calculated the exact amount materials and labor will cost, you’re off to a good start. This base amount will cover whatever you have planned. 

Unfortunately, no renovation ever goes according to plan. There’s always something that goes wrong — whether it’s a delay in getting materials or a structural problem in your home. A budget cushion can help you handle these costly issues without having to put a permanent pause on your project. 

What is a Budget Cushion?

A budget cushion is extra money reserved to handle unforeseen expenses during your renovation. Like an emergency fund, this cushion acts as a safety net you can fall back on before using a line of credit or online loan. An emergency fund is one of the top 7 financial planning tips that help you avoid having to deviate from the plan you’ve set — whether it’s a total kitchen redesign or the goal to pay off debt.    

Determining the Size of Your Budget Cushion

A good cushion size is approximately 10% to 15% of your total renovation budget. However, adjust this percentage based on project scope, home condition, and your risk tolerance. The goal is to strike a balance between preparedness and financial stability.

Why Do You Need a Budget Cushion?

1. Unexpected Expenses

Renovations often uncover hidden issues requiring additional repairs and expenses. Structural concerns, electrical updates, or plumbing problems can quickly eat into your budget. A cushion ensures you can address these unexpected expenses without derailing your plans.

2. Price Fluctuations

Material and labor costs can fluctuate due to economic factors and supply-and-demand dynamics. Having a cushion allows you to adapt to these price changes without compromising quality or your timeline.

3. Changing Your Mind

Let’s say halfway through your reno, you fall in love with a different countertop or want to upgrade your chosen flooring. Changing these things come with additional costs, but a cushion provides the flexibility to accommodate them without financial stress.

4. Your Materials Arrive Damaged or Never Show Up

Imagine the frustration of eagerly awaiting your materials, only to find them damaged upon arrival or worse, they never show up at all. To avoid this setback, ensure you work with reputable suppliers and shipping companies. Be aware of shortages that may impact delivery times and build them into your timeline.  

5. Your Contractor Disappears or Doesn’t Live up to Their Reputation

Despite all your efforts to find a competent professional to do the job, they can fail. Thousands of contractors are taken to court each year over poor workmanship — and that’s only the ones that get sued. Plenty more fly under the radar when homeowners don’t have the financial means or energy to take legal action. 

Having a budget cushion allows you to address issues if your contractor disappears or fails to live up to their reputation. It provides financial flexibility to seek alternative solutions or hire a new contractor.

Build Your Cushion Before You Renovate

A cushion is crucial for a successful renovation project. It offers financial security, flexibility, and peace of mind when unexpected challenges arise. Allocate approximately 10% to 15% of your total budget for your cushion, adjusting as needed. By preparing for the unexpected, you’ll handle challenges with confidence and ensure a smoother renovation experience. Happy renovating!


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