Home improvement can be a costly endeavor. How costly? According to the sixth annual LightStream Home Improvement Survey conducted by The Harris Poll, consumers plan to spend an average of about $9,000 on home improvement costs, the highest amount since the survey began in 2014. In addition, more homeowners this year will take on projects with major price tags. Those planning to spend $25,000 or more on improving their homes grew by 83 percent compared to last year.
To help, LightStream offers three tips to help consumers take on a home improvement project with financial confidence:
Build the Budget: The first step is to price out the bigger expenses, like materials and labor, then move on to inventory everything you will need to complete your project, down to paint brushes and tape. Make sure to leave room in your budget for unexpected expenses.
Drill Down on DIY or Contractor: If you are willing to get your hands dirty, simple DIY-friendly efforts such as painting, demolition and landscaping will save money if you take them on yourself. Projects that include heavy construction, plumbing or electrical work may be best done by licensed professionals, who can save you from headaches in the long run.
Choose the Right Funding: The majority of people taking on home improvement projects this year are planning to tap into their savings (60 percent), followed by credit cards (32 percent) and a home improvement loan (10 percent). While using a portion of savings can be a smart solution, it is also important to consider other funding options before dipping into money set aside for the future, like emergency funds or 401Ks.
When planning larger projects, consider a home improvement loan instead of paying with high-interest credit cards or draining your savings.
“Unsecured home improvement loans can provide immediate financial means, flexibility and low, fixed interest rates for any project,” says Todd Nelson, senior vice president of strategic partnerships at LightStream.